Delivery Is an Appetizing Option for More Fast-Food Chains

Digital delivery is now used by a majority of consumers

Author: Krista Garcia

May 1, 2018

Fast-food delivery was once unthinkable—or at least unpalatable financially, since delivery fees might end up costing more than a value meal. But by the end of 2018 there could be a major uptick in burger-to-door service.

As foot traffic declines and consumers look for more convenient meal solutions, digital is proving to be a bright spot for the restaurant industry. According to a March 2018 report from The NPD Group, foot traffic hasn’t grown more than 1% in years, while restaurant visits via mobile apps—such as those for mobile ordering and delivery—grew 50% year over year. Additionally, digital ordering now makes up the majority (51%) of delivery orders overall. 

And many quick-service restaurants (QSRs) have shifted some of their focus to delivery. Last year, McDonald’s teamed up with Uber Eats and Wendy’s partnered with DoorDash. Meanwhile, Yum! Brands bought a 3% stake in GrubHub and is delivering KFC and Taco Bell to consumers. And, in an earnings call last week, Restaurant Brands revealed that it had been testing delivery at “several hundred” US Burger King and Popeyes Louisiana Kitchen locations in the first quarter.

“With Burger King, it is still early, but the results have been encouraging so far and we intend to meaningfully broaden our test in the coming months,” Daniel Schwartz, CEO of Restaurant Brands, said during the call. 

McDonald’s CEO Steve Easterbrook on Monday reported that more than 11,500 restaurants now offer delivery. “In most of our major markets, delivery is already a meaningful contributor to overall comparable sales,” he said. Average delivery checks were 1.5 to two times higher than in-store checks.

In an April 2018 study, in-store pickup was the mobile feature provided by the largest proportion of QSRs (45%) analyzed, while—in a more comprehensive look at implementation of online features—delivery ranked 17th. Even so, delivery was offered by 27% of QSRs in Q4 2017, a 3.8% increase over the previous quarter.

There’s no reason to believe that restaurant delivery won’t see greater adoption, especially since 36% of US internet users had used a restaurant delivery service in the past 12 months, according to a February 2018 Market Force Information survey. That figure was even higher for all age groups younger than 45: ages 18 to 24 (55%), 25 to 34 (49%) and 35 to 44 (40%).