McDonald’s is looking to push delivery further all around the world, as is clear in a new partnership with Just Eat Takeaway.com (JET).
The global burger enterprise and the Amsterdam-based European delivery consolidator announced the deal without many details. The companies announced the new long-term partnership would mean “evolving their existing local agreements to provide McDonald’s customers and franchisees with the convenience and value of McDelivery in markets across the world,” according to a press release.
In short, McDonald’s is inking a competitive deal with JET like it previously did with Uber. While the details were not disclosed, deals like this come with certain price agreements from McDonald’s and performance promises by delivery providers. It bundles all those “local agreements” under a comprehensive, global contract to standardize everything across markets.
McDonald’s did renegotiate its exclusive deal with Uber and added competing delivery providers since that renegotiation and through the pandemic.
This will “reduce complexity and provide great opportunity to innovate at scale together on operational efficiency and a seamless customer experience,” according to the press release.
That’s part of McDonald’s Accelerating the Arches growth strategy, once that has worked staggeringly well to increase digital orders, much of which is delivery. The company grew from about $3 billion in digital sales in 2018 to $18 billion in 2021, a 500 percent increase. While not all of that is delivery, there is clearly a huge number of people who want their McNuggets and Big Macs brought to them. Since launching the McDelivery program in 2017, it grew from 3,000 to 33,000 restaurants across 100 countries.
For JET COO Joerg Gerbig, it’s also good news. A massive player like McDonald’s means they can grow with some predictable order volume.
“We are excited to announce this new partnership with McDonald’s, which represents a next step in growing a mutually beneficial food delivery business and opens the door for further growth in the markets in which the partnership is active,” Gerbig said in a release. “Furthermore, the partnership will allow for Just Eat Takeaway.com and McDonald’s to partner on initiatives to drive operational improvement, providing benefit to customers through improved speed and accuracy, while accelerating McDelivery order growth. Together with McDonald’s, Just Eat Takeaway.com is committed to working on future innovations that benefit the customers, McDonald’s restaurants and couriers.”
This also shows the impact of consolidation, a mega-trend among delivery aggregators around the world, but a trend that is further along in the European markets. That scale for JET means increased density and a more normalized logistics network.
“This is important to increase the number of drops our couriers can make per hour and reduce cost per drop,” said JET CEO Jitse Groen. “We are implementing enhanced demand management, further optimized order pooling and efforts to reduce waiting times. Overheads and OpEx will be improved by automation and economies of scale. There is considerable operating leverage as we continue to increase volumes and revenues.”
That means he can hit performance requirements from massive enterprise players and maybe take a hit on price per order but make it up in volume—a very McDonald’s approach brought to delivery. It also means McDonald’s pushing delivery will bring more customers to JET increase that customer density even further.