Financing

Burger King and Popeyes are testing delivery

Both brands have the service in “hundreds” of restaurants and plan to expand it quickly.

Both Burger King and Popeyes are testing delivery in “hundreds” of restaurants across the country, executives with parent company Restaurant Brands International said Tuesday.

The brands expect to expand delivery quickly into other markets as they join a growing number of companies seeking to bring their food directly to consumers.

“It’s early,” RBI CEO Daniel Schwartz said on the company’s first quarter earnings call. “Our initial results are encouraging. We’re seeing good results.”

For Burger King, Schwartz said that delivery “has been successful for us” and that the brand plans to further expand its test in the coming months.

At Popeyes, delivery is at “several hundred restaurants in various markets across the country.”

“Consumers have particularly enjoyed using delivery at dinner and for late-night,” which comes with larger check sizes, Schwartz said. “It’s still early but the results are encouraging thus far.”

Delivery is the single biggest trend in the restaurant industry, with multiple brands and independents using third-party services or their own delivery drivers to meet consumer demand for more convenience.

The delivery test is part of RBI’s broad efforts to increase the use of technology inside of its restaurants and through its mobile app. The company, which also owns Tim Hortons, in January named Josh Kobza, who had been CFO, its new chief technology officer.

At the time, Schwartz called his company’s digital efforts “the most critical area of any consumer business today.”

“We’re building out a team and are more actively working with vendors to help accelerate our use of technology to enhance the guest experience,” Schwartz said on Tuesday. He said the delivery tests at Burger King and Popeyes are part of this effort. “The best people are working on this project internally.”

The delivery test comes as both Burger King and Popeyes saw same-store sales growth in the first quarter ended March 31.

At Burger King, same-store sales rose 3.8% systemwide, including 4.2% in the U.S., its biggest market. That sales growth came as the chain faced intense competition from other fast-food concepts offering discounts.

Schwartz credited the burger chain’s U.S. success to its balance of limited-time offers and lower price points with more premium items, such as the Double Quarter Pound King and the Spicy Chicken sandwich.

At Popeyes, same-store sales increased 3.2% in the quarter, including 2.3% in the U.S., a market that had been struggling in recent quarters. Schwartz said Popeyes has gained traction with a strategy of balancing lower-priced items with more premium offers.

Tim Hortons’ same-store sales declined 0.3%, and were flat in the chain’s key Canadian market.

RBI’s stock rose nearly 5% on Tuesday.

Revenues at the company were $1.1 billion in the quarter, up 7% thanks largely to the Popeyes acquisition. Net income nearly tripled to $151 million, or 60 cents per share, from $50.2 million, or 21 cents.

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