McDonald’s tests delivery in New York

As part of their turnaround strategy McDonald’s has launched a delivery service test in the NYC market. The market consists of 88 stores and the ordering and delivery will be managed through Postmates which is a mobile app technology that allows customers to place orders through their mobile device. The delivery is then performed by independent contractors in their own vehicles. Think Uber for food delivery. Postmates also offers the same service for Starbucks and Chipotle.

An article on nrn.com cites that the service cost will include a standard service charge and a fee based on distance. The full menu sans ice cream cones will be available for delivery during normal business hours with some stores offering 24/7 delivery.

Seems like a good test market for McD’s especially since David Chang has launched a new concept based around delivery in the financial district of Manhattan. Population density will keep the service somewhat affordable whereas, more spread out areas would increase the delivery fee. Next best option would be college towns, especially for 24/7 service. In the long run I feel like they will need to develop their own technology and delivery system to launch this worldwide. I’m sure that option is on the table should this test turn out successful. Rather than develop the technology the quicker option would be to acquire it instead. We’ll see what the results turn out to be, we’ll be sure to follow and keep you informed.

I have copied the nrn.com article in it’s entirety below:

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McDonald’s Corp. is testing delivery at 88 restaurants in New York City through the app-based delivery service Postmates, the company said Monday, in its latest effort to modernize its domestic business.

McDonald’s CEO Steve Easterbrook revealed the delivery test during a 23-minute video describing the quick-service operator’s turnaround plan.

In a following announcement, the company described the delivery plan with Postmates as a “test,” starting Monday, enabling customers to have food delivered from select restaurants in Manhattan, Queens and Brooklyn.

“This is a city where delivery is a way of life,” Mwaffak Kanjee, vice president and general manager of McDonald’s New York Metro region, said in a statement. “We are excited to launch this test so our customers can get hot, freshly prepared food right from McDonald’s kitchens, when and where they want it.”

McDonald’s full menu — except for ice cream cones — will be available for delivery during normal operating hours at participating restaurants. Certain restaurants, the company said, will offer delivery 24 hours a day.

A delivery fee for the service will be calculated based on the distance traveled by the courier, plus a standard service charge.

“Our customers continue to tell us they want their favorites from McDonald’s delivered right to their doorsteps,” Julia Vander Ploeg, vice president of McDonald’s USA Digital, said in a statement. “We’ve listened to their feedback and are excited to launch this initiative. We look forward to learning from this test and continuing to innovate as we offer our customers everyday conveniences and new ways to experience our brand.”

The move marks the latest deal between a large restaurant chain and Postmates, which also has delivery deals with Starbucks and Chipotle. Postmates lets customers order delivery online or from a smartphone app, and uses an Uber-style model of independent contractors who deliver food with their own vehicles.

In addition to the operators using Postmates, a growing number of quick-service and fast-casual chains are testing or implementing delivery as a way to expand their reach and improve convenience. Taco Bell plans to test delivery, and Burger King offers delivery in certain markets.

How delivery benefits the restaurants remains to be seen. Executives of Restaurant Brands International Inc., Burger King’s parent company, said last week that delivery has had no impact so far on the chain’s same-store sales.

For McDonald’s, the test further indicates that the company is looking at just about everything as it seeks to lift domestic same-store sales, which fell 2.6 percent in the first quarter and have been falling for more than 18 months.

The company is testing all-day breakfast service, talking about trimming its menu and working on customization, both through a major service model change known as Create Your Taste and another toned-down effort called TasteCrafted.

McDonald’s is also giving different regions more autonomy to run their own advertising and offer their own localized menu items.

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