Expecting more demand for order delivery, McDonald’s announced it’s adding another delivery provider by signing on with Postmates. There may also be a surge in delivery order demand if more consumers stay at home due to coronavirus concerns. No stranger to the delivery logistics business, Postmates operates in many metro areas, and delivers across a variety of retail categories besides restaurants.
Delivery services for both restaurants and grocery stores are caught up in cutthroat competition by offering both introductory discounts and subscription deals. Right now, food delivery companies like Uber Eats, DoorDash, and Grubhub are focused on market share, with profitability taking a back seat. Expect some delivery industry consolidation in the year ahead.
A Yahoo Finance article, excerpted below, discusses more on the topic:
In an effort to drive incremental sales, McDonald’s Corporation MCD has collaborated with Postmates, a leader in on-demand food delivery. Starting this week, McDelivery will be available on Postmates in more than 300 restaurants in the Los Angeles and Dallas areas.
McDelivery, which was launched in 2007, now provides delivery from more than 25,000 restaurants in over 75 countries. In the United States, the delivery service is available in more than 10,000 restaurants. In third-quarter 2019, the company partnered with Grubhub for the rollout of McDelivery to nearly 500 restaurants in the NYC and Tri-State areas. It also partnered with DoorDash. Per management, global delivery contributed more than $4 billion in sales to both McDonald’s and its franchise restaurants in 2019.
We believe the aforementioned efforts will help the company to drive sales. Moreover, the company is undertaking digital initiatives to serve customers better, with nearly all of its U.S. restaurants now using digital menu boards. Additionally, McDonald’s continues to roll out mobile order and pay with a new curbside check-in option.
Bud Lord, senior director of U.S. delivery for McDonald’s said, “As customers demand more convenience, McDonald’s restaurants around the world are working with multiple partners to support the growth of McDelivery.”
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group