Financing

McDonald’s takes its DoorDash deal national

The addition of its second delivery partner means the chain now has the service in more than 10,000 restaurants.
Photograph courtesy of McDonald's Corp.

McDonald’s Corp. is taking its relationship with DoorDash to a new level.

The Chicago-based burger giant is adding delivery through the service to markets across the country following an initial test in Houston.

The addition of DoorDash in more markets, along with McDonald’s 2-year-old deal with Uber Eats, has brought third-party delivery to more than 10,000 of the chain’s nearly 14,000 restaurants.

The coverage is important for McDonald’s, which was an early adopter of delivery in 2017, when it rapidly expanded into thousands of locations with what was at the time an exclusive deal with Uber Eats.

But it has taken some time for the chain to get enough coverage to be able to market the service nationwide. It began marketing the service in May, hoping to build customer awareness that it has delivery available, which the company believes is important for the service to generate sales.

“Our biggest opportunity on delivery in the U.S. and around the world is customer awareness,” McDonald’s CFO Kevin Ozan said in May. “That’s the biggest focus right now because we do have pretty high repeat order rates.”

Executives said in July, meanwhile, that operators have embraced delivery, particularly since the company reconfigured its contract with Uber Eats and gave concessions on rent to offset some of the commissions delivery providers charge to the operators.

“We are clearly keen to roll this out,” CEO Steve Easterbrook said, according to a transcript on financial services site Sentieo. “The owner-operators know this is a great business opportunity.”

The company said in July that it expected thousands of restaurants to add DoorDash as a delivery option this month.

The decision mostly gives McDonald’s customers multiple options for their delivery provider.

The vast majority of restaurants will have both Uber Eats and DoorDash. There is a growing belief among restaurant executives that delivery customers tend to be “sticky” with a single provider.

As a result, more companies have been deploying multiprovider strategies. “Customers are typically loyal to one third-party operator app,” Easterbrook said.

Some restaurants—more than 1,000, Easterbrook said in July—will just have one provider or the other because of the companies’ relative geographic strengths. As such, the DoorDash deal provides greater overall coverage.

The DoorDash deal also gives McDonald’s access to an especially loyal group of customers: Those who use its DashPass subscription service.

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