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McDonald’s plans to rapidly roll out delivery in US

Executives say strong consumer demand for delivery exists

The market for restaurant delivery is growing rapidly, and McDonald’s Corp. wants a piece of it — a big piece. 

The Oak Brook, Ill.-based burger giant is quickly making a big move to start bringing its food directly to customers. 

While McDonald’s effort in the U.S. is limited to a couple of markets in Florida, with UberEats, executives at an investor meeting on Wednesday made it clear they plan to make the service quickly available everywhere.

“We’re not testing; we’re rolling out,” McDonald’s CEO Steve Easterbrook told reporters at the meeting. “We’ll be bringing in major international countries this year, and we’ll be expanding in the U.S.”

McDonald’s is already a big delivery player around the world. The company started delivering in Egypt 20 years ago. Delivery is particularly popular in the Asian markets of China, Singapore and South Korea.

The company has largely operated its own delivery services, McDelivery, but has more recently been using more third-party delivery services. McDonald’s is working on various iterations of delivery around the world.

Its domestic effort is focused on the use of third parties. Executives say using delivery providers could help McDonald’s add the service to its 14,000 U.S. locations far more quickly than it could if it employed the drivers.

“You can extend and take part of the market much quicker through third party,” Easterbrook said. 

Delivery is a rapidly growing element in the restaurant industry, and restaurant chains across the spectrum — from limited-service chains like Panera Bread, to polished-casual concepts like The Cheesecake Factory — have been working to take advantage of it. 

“The market is exploding,” said Lucy Brady, McDonald’s chief strategy officer. “In my opinion, it’s the most significant disruption in the restaurant industry in our lifetimes.” 

McDonald’s says it is well positioned to successfully take advantage of the trend.

The quick-service chain is everywhere, and the vast majority of Americans live near one of its locations. The company said 75 percent of residents in its five largest global markets, including the U.S., live within three miles of a McDonald’s. And 85 percent of people in those markets live within five miles of a McDonald’s restaurant.

That could make it easier for the chain to deliver food quickly to a large number of customers. 

“No one else has that extraordinary footprint,” Ian Borden, president of McDonald’s foundational markets, said during the event. “We can get hot, fresh food into customers’ hands.”

McDonald’s says consumers are demanding delivery. Thirty percent of core customers would be “very interested” in delivery, the company said. That percentage is on par with all-day breakfast, according to Brady, which is widely considered a successful promotion for the chain. 

In addition, she said, third-party delivery providers have told the company that McDonald’s is one of the most searched-for restaurants.

“There’s a customer demand that we’re not meeting,” Easterbrook said. “It’s truly satisfying a customer-led desire. It’s not like we’re going in as a very early adopter, trying to create a market. The market exists. We’re just not serving it.” 

Executives stressed that adding delivery is relatively easy. UberEats couriers in the Florida markets tend to go through the drive-thru to pick up the orders. 

“There are not barriers to entry, and there are not barriers to accelerate,” Easterbrook said. “Until we find a reason not to, I think you’ll find us accelerate.” 

Executives would not say what kind of sales lift restaurants get from delivery, but they noted that orders tend to be larger and come in during off-peak hours. 

“That makes it very incremental,” Brady said. 

Contact Jonathan Maze at [email protected]

Follow him on Twitter: @jonathanmaze

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