The sooner the better, as order ahead could be a bigger sales channel than delivery.
— Erika Adams
Taco Bell wants to put its chalupas and double decker tacos in as many hands as possible, and Grubhub is happy to assist.
Yum Brands CEO Greg Creed told investors on the company’s first-quarter earnings call on Wednesday that, following Taco Bell’s nationwide rollout of delivery through Grubhub in February, the chain is in the process of testing order ahead functionality on Grubhub’s app.
Creed noted that “click-and-collect” (the company’s term for order ahead and pickup) has been available on Taco Bell’s website and proprietary mobile app for some time, but customers have yet to be able to order Taco Bell for pickup on Grubhub’s app on a nationwide scale. Taco Bell has been running its own mobile app since October 2014 and mobile ordering launched in September 2015.
Order ahead is a giant slice of the potential marketplace for off-premise sales — bigger, even, than potential delivery sales. According to Euromonitor data, consumers spent $795 billion on restaurant meals from home (delivery, takeaway, and drive-thru) globally in 2017. Of that amount, only $161 billion, or about 20 percent, was spent specifically on delivery. The demand for buying meals through order ahead for pickup and drive-thru is far greater.
When Grubhub acquired LevelUp last year in a $390 million deal, it was partially to help strengthen the company’s position in the order ahead category. “We think pickup is another channel that’s just going to unlock a lot of opportunity,” Grubhub’s former Chief Operating Officer Stan Chia said at Skift Restaurants Forum last fall.
Taco Bell was the first of the company’s three brands to put its marketing machine behind the Grubhub partnership, when the brand announced nationwide delivery from 4,000 U.S. restaurants through Grubhub in February. Creed declined to break out any data around how the initiative has performed so far, saying that it was still early days for the new program.
“Feedback has been positive plus the strength of our partnership with Grubhub has allowed for real-time feedback and learnings to continue to elevate the customer experience to even higher levels,” Creed said.
Grubhub is providing technology infrastructure across Yum’s entire portfolio, but each partnership is tailored to the specific brand’s needs. Grubhub is powering KFC’s forthcoming app, for instance, while Taco Bell maintains its own app separately. Grubhub will be fulfilling delivery orders for KFC and Taco Bell, but Pizza Hut is deploying its own delivery drivers to complete orders made through Grubhub’s marketplace.
First-Quarter Earnings Results
Taco Bell reported same-store sales growth of 4 percent in the quarter, coming in slightly below analyst estimates. System-wide sales were up 7 percent compared to the same period last year.
Yum Brands globally reported an 8 percent growth in system-wide sales and a 4 percent growth in same-store sales in the quarter.