News

Redbox, a kiosk-ATM hybrid, doesn't work for McD's

November 13, 2003

WASHINGTON -- A test of a concept that a McDonald's executive said would "do for the convenience store industry what ATMs did for the banking industry" is over.

McDonald's has pulled the plug on the Redbox, 24-hour kiosks that dispensed a variety of convenience foods and groceries, including milk, eggs, bread, detergent, shaving cream, paper towels, bandages and sandwiches. They took credit cards and cash and featured an ATM with a 25-cent surcharge.

According to an Associated Press report, a tarp covered the minivan-size machine in Washington, D.C., on Nov. 12, and a sign thanked customers for their business. However, a DVD rental service remained active, charging $2.97 for a three-night rental.

McDonald's closed four such machines in the metro area, most of which were outside McDonald's restaurants. The pilot was only in the D.C. area.

Local residents said the ATM occasionally ran out of money. They also said that while the DVD rentals did a brisk business, it was rare to see anyone buying the other items.

"McDonald's is focused on bringing more customers into our 30,000 existing restaurants all around the world," said McDonald's spokeswoman Lisa Howard. "Unfortunately, the Redbox automated convenience store didn't fit into that long-term growth strategy."

DVD rentals will continue at kiosks. "That initiative does have the potential to add more customer visits to our restaurants," Howard said.