McDonald’s Deliveroo deal bolsters at-home offering

By Nick Hall | 13 Feb 2020 View comments

Fast food icon McDonald’s has bolstered its home delivery offering, announcing a strategic alliance with Deliveroo. Kicking off this month, the new McDonald’s Deliveroo partnership follows significant growth in to-door delivery services, buoyed by the fast food industry’s swelling convenience culture.

McDonald’s Deliveroo venture will see more than 400 restaurants open for ordering through the online delivery service’s app, however, isn’t the first time McDonald’s has weighed into the third party delivery aggregator market. The brand already holds a partnership with UberEats, in addition to offering McDelivery for metro customers.

Jennifer Evans, head of home delivery at McDonald’s Australia said evolving consumer ordering preferences had prompted the chain to revamp its delivery structure.

“Delivery is an important part of our business as we look to continue to responding to the evolving needs of our customers,” she said.

“We know our customers love convenience and we’re thrilled to be partnering with Deliveroo to provide another way for customers to easily order and enjoy their favourite Macca’s menu items, on their terms.”

McDonald’s Deliveroo deal

The latest McDonald’s Deliveroo partnership highlights just how substantial the impact of online delivery services on the fast food industry has become. In 2019 alone, Deliveroo reported a 30 per cent increase in restaurant offerings, with more than 14,000 partners now available across the country.

Ed McManus, Deliveroo CEO said that partnerships with big-name players such as McDonald’s opened the door for further industry growth.

“Deliveroo aims to offer the widest selection of restaurants of any platform so we can cater for every customer and every occasion. We have ambitious plans to grow our business in 2020 – this partnership with McDonald’s will help us achieve that,” he said.

“At a time when consumer habits are evolving and people are looking for greater convenience, we’re excited to be bringing this iconic brand to even more customers across Australia.”

Deliveroo is currently the number two platform in Australia’s highly competitive online food delivery market, with 17.5 per cent of the market, according to research from IBISworld. Uber Eats is estimated to have nearly 60 per cent.

But the partnership with major national chain McDonald’s could see Deliveroo increase its share of the market, if it is able to provide a more attractive offer than Uber Eats.

The current prices for McDonald’s menu items are virtually identical on Deliveroo and Uber Eats, though the Quarter Pounder is 5 cents cheaper on Deliveroo, and the McChicken is 15 cents cheaper.

Deliveroo also charges just $4.95 for delivery on McDonald’s orders, compared to $5.99 on Uber Eats, though the fee may change depending on the distance and time it takes to deliver.

Deliveroo has not disclosed the terms of the agreement it reached with McDonald’s, though major players are understood to get better deals than smaller chains or independent restaurants, which may sacrifice as much as 30 per cent of their margin to delivery platforms.

Additional reporting: Heather McIlvaine