McDonald's is proving just how profitable delivery can be for restaurants in this space. For the chains that continue to hold back on delivery, it's their loss.
— Erika Adams
McDonald’s delivery business is paying off in huge numbers for the fast food giant. According to CEO Stephen Easterbrook, McDonald’s now offers delivery (powered by an extensive and exclusive Uber Eats partnership) in 13,000 of its restaurants around the globe, up 60 percent from 7,800 restaurants just one year ago.
“It’s exciting to see how Uber Eats is changing the perception of food delivery around the world,” Jason Droege, vice president and head of Uber Everything, told Skift Table in an email. “Through our growing partnership with McDonald’s, we’re able to help restaurants scale their businesses and reach new customers.”
Of the McDonald’s restaurants that offer delivery, it now accounts for about 10 percent of food sales in those locations. That percentage will only keep growing as well, given that the average McDonald’s delivery check size is about 50 percent higher than the in-store check size.
“We’ve been moving at a pace for this unprecedented in the McDonald’s system,” Easterbrook said on the company’s most recent quarterly earnings call.
Easterbrook went on to explain that not only is delivery a huge growth market for the company, but it is one that requires “no additional investment” from McDonald’s side. In short, it’s an incredibly profitable business for the chain.
Of course, it helps that McDonald’s is a juggernaut in the industry, and has a lot of negotiating power when it comes to working with third-party delivery services. Added to that, it sealed its official partnership with Uber Eats when the delivery service was still in its early days. Uber Eats needed the giant exposure that McDonald’s could provide, and the terms of the deal were likely very favorable towards McDonald’s.
Not all chains view delivery the same way. Chipotle has heavily invested in building out second make lines in all of its restaurants specifically to get delivery orders out the door faster.
As the restaurant footprint gets smaller, delivery is even more of an investment. Independent restaurateurs have often griped about the 10 to 30 percent commission that third-party delivery services will charge, and then they have to spend time and effort figuring out how to package their dishes for delivery.
A McDonald’s hamburger is a McDonald’s hamburger. Customers aren’t going to run screaming to Yelp if it arrives a bit smushed.