McDonald’s home deliveries surge amid stage 4 restrictions

Australia’s McDonald’s franchise has outperformed the global business and led to it making a massive commitment to home orders.

Australia’s McDonald’s division has bucked the global company’s costly profit plunge through the coronavirus crisis due to a surging appetite for home delivery.

The fast food giant’s local operation has soared to record levels, doubling to 10 per cent since the pandemic forced the population to retreat indoors.

McDonald’s will now embark on an in-house delivery network of drivers to cater to its regional zones to work alongside its external partners including UberEats, The Australian reported.

Deliveries have expanded from being available at 600 stores to nearly 900, which is nearly all sites except for those in food courts.

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The Australian operation has recovered from a lean period earlier in the year and sales are now back at 2019 levels, a rare achievement for the global entity which last week revealed an annual plunge in profits of nearly 70 per cent.

“Online delivery was about 5 per cent of our business before COVID-19 and already a strong part of our business with 600 restaurants,” McDonald’s Australia chief executive Andrew Gregory told The Australian.

“I think what we recognised straight away, as trends were accelerated during COVID-19, was delivery.

“So we increased our delivery, and we have a few formats by which we deliver – one of which is through third party providers such as UberEats, Deliveroo and DoorDash, and we increased the number of restaurants using those platforms.”

Social distancing measures have taken a massive chunk out of the McDonald’s global business. Picture: Noah Seelam/AFP

When reporting the company earnings result last week, global chief executive Chris Kempczinski cautioned there are “a lot of warning signs out there that would suggest the consumer sentiment and consumer concerns about the economy is negative and going in the wrong direction”.

“The vagaries of the pandemic create an unpredictable operating environment,” he said on a conference call with analysts.

“In many markets around the world, most notably the US, the public health situation appears to be worsening.”

Earlier in the year, just 75 per cent of the chain’s 39,000 global stores were open as revenue collapsed 30 per cent to $US3.8 billion ($A5.3 billion).

About 96 per cent of the stores are now open as the recovery for sales picks up, which has been accelerated by markets that focus on drive-through service.

Performance is returning at a more steady rate for its business in Australia and Japan, where the sales are already stronger than they were in 2019.

McDonald’s deliveries have spiked in recent months within Australia, which now makes up 10 per cent of its total local sales.

“It’s time for us to get back on the front foot,” Mr Kempczinski said. “But it also means that we’re going to be thinking about the role affordability and value can play.”