Should Smashburger Replace McDonald’s in Walmart?

Introduction

Smashburger, a lesser-known restaurant with fewer than 300 locations, has a limited presence in comparison to Walmart's expansive network of over 4700 stores in the United States alone. While the idea of integrating Smashburger into Walmart might seem intriguing, several factors suggest that it may not be a feasible or beneficial move for either entity.

The Challenge: Scaling Up and Contrasted Business Models

In my area, Smashburger operates as a sit-down restaurant, requiring a considerable amount of time to prepare and serve each meal. On the other hand, McDonald’s provides a fast-serve experience through drive-thrus and walk-by options, ensuring a quick and convenient service to customers. Walmart’s locations are already crowded, making it impractical to accommodate a sit-down concept that would lead to long waiting times and slow service. This discrepancy in service models means that Smashburger and Walmart's integration may not align well with the existing customer expectations and operational demands.

Price Points and Customer Demographics

The price point for Smashburger burgers is significantly higher compared to McDonald’s items. A typical Big Mac from McDonald’s, currently priced at around $4-5, does not justify the higher prices charged by Smashburger. Even if the regular Big Mac price were to increase to $6-7, the price difference remains substantial. Additionally, the majority of Walmart shoppers rely on Supplemental Nutrition Assistance Program (SNAP) benefits to purchase both in-store and fast-food items. Unlike McDonald’s, which often accepts SNAP benefits via digital cards or mobile platforms, sit-down restaurants like Smashburger are typically not equipped to process these payments. This regulatory and logistical challenge could deter the implementation of Smashburger within Walmart.

Market Competition and Customer Expectations

The success of McDonald’s in Walmart locations is largely attributed to their proven track record and recognition as one of the most popular burger chains worldwide. Moreover, the demographic of Walmart shoppers is largely the same as those who shop at McDonald’s. Given these factors, it is highly unlikely that an upscale burger joint like Smashburger would fare better in Walmart locations. The upscale nature of Smashburger may not align with the pricing and service expectations of Walmart customers.

Conclusion

Integrating Smashburger into Walmart would likely not be beneficial for either party. While Smashburger offers high-quality burgers, the incompatibility in service models, the significant disparity in price points, and the challenges related to payment methods and customer expectations make it a challenging proposition. Until there is a clear alignment of these elements, Smashburger and Walmart would be better off maintaining their current business models.

Final Thoughts

The decision to replace McDonald’s with Smashburger in Walmart stores should be approached cautiously. Ensuring that the customer experience is seamless and meets the expectations of Walmart shoppers is crucial for any successful integration. Ultimately, the unique qualities of each brand should be respected and preserved to maintain customer satisfaction and loyalty.