The Impact of Third-Party Food Delivery on Quick Service Restaurants

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According to the 2023 Gridwise Gig Mobility Report, QSRs emerged as the leaders in the delivery market, dominating the top ten restaurants for delivery. They adapted and thrived in this new normal.

Much of this growth has been a by-product of the pandemic. QSRs with delivery in their service mix did a booming business, propelled by sales to customers looking for a contact-free transaction. As the pandemic subsided and Americans learned to live with COVID-19, these same consumers continued many new habits, including food delivery. 

Those QSRs that continue to thrive do so because they take advantage of one of the powerful by-products of food delivery: the collected data. They can see the demographics of who’s ordering, what they’re ordering, when they’re ordering, the ticket size, and other trends and patterns. Larger chains have already mastered much of this data implementation, but smaller chains and independents still have open opportunities. 

Here's what we cover:

How does Gridwise Analytics gather this data on QSR food delivery?

Gridwise markets one of the leading companion apps for food delivery drivers. The app gives drivers insights into their earnings—when and where to drive, traffic reports, weather reports, etc.—allowing them to be more efficient in their work. In the US, more than 500,000 gig drivers use the Gridwise app, linking it to the various food delivery platforms they work with. 

Gridwise Analytics segments driver data so that Gridwise can specifically break out QSR  delivery drivers and look at their activity. Gridwise captures driver information, such as where orders come from, where they’re delivered to, time of day, and driver earnings, then anonymizes and aggregates it into delivery data. This data correlates up to 98% against quarterly metrics reported by the individual platforms. This is the only study of its kind. 

QSRs dominate the delivery landscape

The 2023 Gridwise Gig Mobility Report lists the top ten restaurants in the US marketplace that are most popular for food delivery based on number of trips. Not surprisingly, QSRs dominate the list:

  1. McDonald’s
  2. Taco Bell
  3. Starbucks
  4. Chick-fil-A
  5. Chipotle
  6. Wendy’s
  7. Wingstop
  8. Panda Express
  9. Burger King
  10. Dunkin’

Why understanding third-party food delivery is critical to success for QSRs

Food delivery data affords owners and managers of QSRs a deep dive into their delivery customers. Insights include:

  • Defining your customer base. Delivery allows QSRs to expand their customer reach beyond their physical location. Delivery data tells you how far your reach extends. This ability to attract new customers is especially important for small and independent QSRs. 
  • Fine-tune the delivery menu. Delivery customers have favorites, which can differ from in-store orders. By watching delivery trends, you can optimize the delivery menu, increase orders with add-on sales, and increase profits. 
  • Insights into pricing. Delivery data allows you to experiment with and gauge the results of pricing strategies and determine what the QSR customer is willing to pay for delivery services. 
  • Defining marketing strategies and tactics. Delivery data uncovers new customers, allowing you to tailor your marketing and reach more people. 
  • Make better staffing decisions. Gridwise Analytics provides historical data so you can make accurate staffing decisions for your QSR. What was business like last year during March Madness? What events require you to add staff? What are the busiest days of the week?
  • Better inventory decisions. Again, you can look at the historical data and determine the proper inventory levels. No one likes to run out of a menu item. You miss out on sales, and customers remember those things. 

The landscape of food delivery for QSRs

Third-party food delivery accounts for an estimated $29.8 billion in revenue for restaurants in 2022. Industry projections are that by 2028, food delivery will represent $64.8 billion. 

DoorDash dominates the third-party delivery market in the US, with a 78.6% market share as of December 2023. Uber Eats commands less than a fifth of the market, at 18.7%. Grubhub has a 2.7% share. 

Despite DoorDash’s dominance of the US market, individual companies dominate specific regional markets. A 2021 report by McKinsey & Company revealed that DoorDash had about a quarter of the market in New York City, with Grubhub holding more than a third. 

Market shares fluctuate regionally all across the US. We can expect this regional share to continue to fluctuate as gig delivery companies experiment with offers and partnerships to build their market share. 

How do food delivery apps make their money?

There are as many models for making money in the food delivery business as there are companies, but here are a few main ways. 

  • Commissions. The delivery companies charge each QSR a commission on the order. This ranges, usually up to 20% of the order but sometimes lower. Some QSRs pass this charge along to the customer; others don’t. It comes down to what the market will bear. 
  • Charges to the end customer. The food delivery company also charges the end customer. 
  • Special services. Food delivery companies also allow QSRs to post their menu on the app, sometimes for a fee. The cost often affects the ability to make changes quickly, add new items, and increase the QSR’s prominence on the app. 
  • Promotions. Many major platforms have tied into third-party partners like Amazon and Disney. 

Things are constantly changing. Expect to see more partnerships and services aimed at making delivery more efficient for QSRs and more profitable for delivery companies. 

It is important for QSR executives to consult the data in their markets to determine the dominant delivery platform and develop a strong relationship with it. For that delivery platform to remain competitive in that market, it must have a strong contingent of drivers. For QSRs, available drivers mean food gets delivered quickly, which translates to happy customers. 

Gridwise Analytics offers QSRs granular data 

For QSR operators and decision-makers, the more granular the information, the better they can make calls on items such as menu offerings, pricing, marketing campaigns, and other parameters. Below are samples of the information available to QSRs. You can see what the competition is doing, look back at historical data, and see what’s happening in real time. 

Restaurant delivery efficiency, measured by speed and distance

While distance remains similar for all QSRs, the duration of the trip is longer for Burger King than it is for McDonald's by about ten minutes. This could be caused by traffic congestion, kitchen operations, or increased on-site customer demand. Since these are averages, very long trips could also skew data higher for specific QSRs. If you’re interested in optimizing your QSR performance, Gridwise can show which specific restaurants are taking longer than others within a city. While a three minute difference may not sound like a lot, QSRs must optimize operations to enhance profit margins.

QSR operators can see average delivery charges from any store and compare them against other stores and the competition. Obviously, operators want to recoup the cost of delivery in their charges to the customer. 

QSR Operators and decision-makers can also examine the smallest and largest deliveries for orders. This information can give operators greater insight into what kinds of delivery charges the market will accept. 

Map-based information

Source: Gridwise Analytics

Gridwise can also generate maps with heat overlays to reflect activity. This map example shows how your QSR matches up to the competition for pre-selected parameters. In this case, we’re looking at information on McDonald’s, Taco Bell, and Burger King. The map feature can be programmed to reflect activity on specific dates and times. 

Gridwise Analytics shows the entire picture

Individual delivery companies share their data with QSRs but often charge for it and limit the data they share. In addition, their data is limited to what is available through their app. Uber Eats and DoorDash can provide data for their platform only. Gridwise Analytics provides data that crosses over, supplying a bird’s-eye view of all QSRs and all food delivery apps. 

Gridwise Analytics can also drill down for a more granular focus, looking at individual stores in a chain for location-level insights.

This option of both a micro and macro focus across all delivery platforms for QSRs is only available from Gridwise. 

Contact Gridwise Analytics for more information

Gridwise Analytics is the ground truth source for delivery data in the QSR sector. Our information is timely and accurate and can fit into your existing databases with minimal manipulation. Get in touch with us today to discover what we can deliver. 

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