McDonald’s relies heavily on delivery to keep customers happy – Quartz

Even with dining restrictions lifted at restaurants around the world, McDonald’s is betting Big Mac deliveries will remain in demand.

Over the past five years, the fast food chain has increased its delivery capacity tenfold, from just 3,000 of its restaurants to more than 32,000 restaurants worldwide, said Christopher Kempczinski, CEO of McDonald’s, at a conference call with investors today (October 27). The company doesn’t detail the numbers for delivery, but “the business has grown into billions and billions,” Kempczinski said. Orders per delivery have also increased, as customers tend to order for multiple people, he said.

Tech-savvy customers are forcing the restaurant chain to adapt. So far this year, more than 20% of sales, or roughly $ 13 billion, in McDonald’s six largest markets have come from digital channels, whether through the app, restaurant kiosks or delivery. , Kempczinski said. These markets are the United States, United Kingdom, France, Germany, Canada and Australia.

It helps generate profits: In the third quarter, McDonald’s net income rose to $ 2.1 billion, up 22% from the same period last year.

The pandemic accelerated the sudden demand for food delivery, which Kempczinski admits was not something the company saw coming. “[W]It became evident that the delivery met a customer need that I think none of us fully appreciated, even maybe a few years ago, ”he said. “So it’s here to stay.”

The future of McDonald’s delivery

Continuing tension for restaurants is the commission charged by food delivery companies, an issue that even a multi-billion dollar global restaurant chain faces. McDonald’s continues to negotiate with third-party operators over delivery rates, using its massive scale at the bargaining table. “[W]What we are trying to do through these conversations is take advantage of the fact that we are the largest restaurant company in the world, that we have the capacity to generate traffic … and that should be reflected in the rates that we pay, ”Kempczinski said.

McDonald’s executives on the call also said they are also reflecting on how the popularity of delivery will change the customer experience at seat restaurants and potential scenarios of how to repurpose the space if the dinner does not return to the level it was before the pandemic.

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