A DIGITAL CAPABILITY IS NOT OPTIONAL, HERE’S “BEST IN CLASS” + DETAILS

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A DIGITAL CAPABILITY IS NOT OPTIONAL, HERE’S “BEST IN CLASS” AND THE DETAILS

It is clear that the age of convenience is upon us and a digital ordering capability (which most often includes an active Loyalty program) is a requirement. In this regard, we recently surveyed, by way of the most recent quarterly reports and conference calls, twenty publicly held restaurant companies. Virtually all spoke of the emphasis and the progress in this area. For our readers that have the time to peruse the details we have provided below the bullet point comments of each company. The “elevator pitch”, however is that five companies, McDonald’s, Starbucks, Wingstop, Domino’s and Chipotle are best in class by far, and should reap major benefits from their leadership position. In terms of active app users: McDonald’s has 40M, Wingstop 20M, Domino’s 27M and Chipotle has 20M. It should be noted that digital orders these days accounts for 40-75% of all order at the leading brands, Loyalty members spend up to 50% more/order and with higher frequency, and digital ordering is driving the increase in ghost kitchens. These five powerful brands have been built by way of convenient locations (especially at MCD, WING and DPZ), the quality of the food (to varying degrees at all five) and the overall experience (especially at SBUX and CMG). Designed so that the food quality does not suffer in the process, the digital app no doubt builds on the convenience and overall experience.

 Company Comments:

  • MCD-
    • McDonald’s In Q1 had nearly $1.5 billion in digital sales, which includes app, kiosk and delivery.
    • 20M active app users, with loyalty yet to come.
    • 85% of the US population actually comes to MCD at least one time a year.
    • 40M active app users in just the top 6 markets,+ millions more around the world.
  • SBUX
    • Starbucks -Digital continues to be a significant driver of the sales recovery in the U.S. Starbucks Rewards’ contribution. Second consecutive quarter of all-time highs.
    • 52% of U.S. company-operated sales in Q2 were driven by Starbucks Rewards members.
    • Total 90-day active members grew by over 1 million members in Q2 to a record 22.9M out of 80-90M total addressable customers.
    • 90-day active SR member base has expanded by 19% in the last 6 months.
    • Mobile orders represented 26% of U.S. company-operated transactions, up from 18% a year ago.
    • Their AI engine is called Deep Brew, which personalizes offers and suggestions it makes to customers.
  • CMG
    • Chipotle Q1 digital sales grew 134% YOY to $870M, 50% of sales, vs. 20% in ‘20
    • 800K app downloads most since May 2020.
    • 20M enrolled in rewards program. 60% active.
    • Average store is doing $1.2M in digital sales alone.
  • EAT
    • Brinker,30-40% of sales are digital.
  • YUM
    • Yum Brands’ digital system sales were over $5B up 45% YOY.
    • 43% of total sales.
    • The Habit-40% of sales are digital.
    • KFC drive through 15 seconds faster.
    • Taco Bell fastest drive through times in 8 years. 17M more cars than last year and 1/3 were digital orders.
  • QSR
    • Tim Hortons- 30% of sales digital +100% YOY.
    • TH – 2 million incremental downloads.
    • TH – 40% engagement
    • TH – 45,000 unique offers delivering personalize experience.
    • Burger King- 9% of sales are digital +40% YOY.
    • BK – Rolling out loyalty program Royal Perks.
    • Popeye’s 70% of sales are digital, +100% YOY.
    • Popeye’s rolling out loyalty program.
  • TXRH
    • Texas Roadhouse – 55% of call-in orders are now digital.
  • CBRL
    • Cracker Barrel – Third party delivery 25% of off-premises sales.
  • WING
    • At Wingstop 60% of sales are digital.
    • 20M unique users.
    • Stated goal of digitizing 100% of transactions.
    • $1B in digital transactions a year.
    • Delivery mix is 70% WING and 30% third-party.
  • SHAK
    • Shake Shack Just launched digital delivery on app.
    • 50-60% of sales are digital.
    • 5M transactions over last year.
    • 90% retention of digital sales when stores reopen.
    • Digital only AUV of $2M annualized.
  • CAKE
    • Cheesecake Factory, $4M in off-premises sales per store.
  • BLMN
    • Bloomin’ Brands – 65% of off-premises sales are handled digitally. +147% YOY.
  • DRI
    • Darden – 19% of total sales were digital transactions
    • 50% of guests settle checks digitally, either online,tabletop tablets or Mobilepay.
  • WEN
    • Wendy’s – Digital is 7.5% of sales
    • 13M total members on app. 3M active every day.
    • Improving loyalty program.
    • Goal is 10% of U.S. sales coming through digital channels by year-end. Was by 2024 originally.
    • Mobile orders have 15-20% higher average checks.
    • Delivery orders have 40-50% higher average checks.
  • JACK
    • Jack In The Box just launched loyalty program.
    • Digital off-premises sales 7% of total sales +150% YOY.
    • 95% of restaurants use at least 1 third party delivery partners. 80% uses at least three.
  • PZZA
    • Papa John’s – 50% of digital orders come from Papa Rewards customers.
    • 70% of orders are digital, up from 62% two years ago.
    • Sales through third party aggregators up 5X YOY
    • Has been digital for 20 years. 20M loyalty members. Was 12M in ’19. Higher ticket and higher frequency.
    • 11M new digital customers in last 12 months. 50% enter loyalty program.
  • PBPB
    • Potbelly added 132K new Perks loyalty members +26% YOY.
    • Perk sales increased 11% YOY.
  • RRGB
    • Red Robin has 9.7M loyalty members +300K QoQ.
    • Marketing is 100% digital media.
  • BFI
    • Burger Fi had 1.6M delivery and BurgerFi app orders in 2020.
    • 30% of total system sales.
    • Delivery and digital sales up 80% YOY.
  • DPZ
    • Domino’s has 27M active loyalty members.
    • 70% of U.S. sales are digital

SUMMARY PROVIDED ABOVE