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When an 800-pound gorilla delivers

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Wondering if the potent combo of tech and delivery can help your brand? Here’s what the elixirs have done to date for McDonald’s, as indicated by information the chain shared with investors last week. The data reveal how much business kiosks and delivery are landing for the chain, and what portion of delivery is incremental rather than a reallocation of dollars that would have been spent anyways.

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Kiosks: Success or a gimmick?

In Canada, where virtually every McDonald’s has been outfitted with the self-ordering stations, 27% of sales are coming through the high-tech devices, up from 12% to 13% in Year One rollout, revealed CFO Kevin Ozan. The numbers are significant not just because of the volume they signify, but as gauges of how consumer behavior is changing. “It goes up exponentially but you’ve got to give customers time to get used to that,” he told portfolio managers attending the RBC Consumer & Retail Conference in New York City.

McD’s executives say the tally will only increase as the novelty wears off and using the kiosks becomes second nature to guests, like pulling into the drive-thru lane. And their comments suggest American consumers are no different than their Canadian customers in that regard.

How delivery has changed sales

Ozan did not reveal the absolute volume of sales that 2,000 test units are snagging with delivery, but he noted that 60% of the orders are being placed in the evening and late at night—normally shoulder periods for the chain.

“That’s when our restaurants are [a] little less utilized than during the day time,” Ozan said. “So, that’s a helpful thing from our perspective.”

How much is incremental?

Ozan suggested it should be no surprise that McDonald’s intends to expand delivery to 3,500 restaurants by the end of this month: “70%-plus is incremental,” he said.

“We’re expanding right now basically as quickly as UberEats can keep up with us,” he said, referring to the brand’s third-party delivery partner.

Ozan also revealed that sales of breakfast items later in the day have slipped from the high hit immediately after making the items available for lunch and dinner. But the remaining business is significantly incremental, he said.  

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