Digital sales are fueling fast-food chains’ growth

Leading fast-food chains are reporting that a year of growth in 2021 was fueled by a surge in digital sales, which are making up an increasing percentage of orders.

The shift towards off-premises consumption is set to outlast the pandemic. Sales of that nature have largely held firm even as indoor dining has been reintroduced in many jurisdictions in recent months.

That is dovetailing with an increased integration of and reliance on technology at the point of sale, with online and mobile orders now a dominant facet of foodservice.

Take McDonald’s, for example. Restaurant Business reports that more than a quarter of the sales at the chain’s restaurants in its six biggest global markets are now coming through digital channels.

Then there’s Restaurant Brands International, the parent company of Burger King and Tim Horton’s amongst others. RBI revealed that its global digital sales nearly doubled from US$6 billion in 2020 to US$10 billion in 2021 and accounted for 30 per cent of its system-wide sales.

More than half of sales in international markets came from digital orders in the fourth quarter.

Tims has taken longer than Restaurant Brands’ other chains to bounce back from the pandemic in its home market because of the Canadian market’s comparatively sterner restrictions.

Meanwhile, Starbucks, which has a traditionally strong digital presence, has utilized more traditional convenient ordering such as its drive-thrus to drive takeout sales. That has worked to great effect: more than 70 per cent of the chain’s US sales now come from mobile order and pay, drive-thru, and delivery.

Pre-pandemic, pizza chains like Domino’s, Papa John’s and Pizza Hut had already been getting a majority of their orders through digital channels and were leading the field in that regard. Traditional fast-food chains’ growth on that front had been slower, but the pandemic changed that.

Digital orders offer many advantages to restaurants, not least increasing the scope of profitability because employees aren’t taking the orders and due to the significant potential of up-sell.

Loyalty to key driver

One of the biggest drivers of the digital trend is loyalty programs. The MyMcDonald’s Rewards loyalty program, introduced last year, now has some 21 million active users.

Other chains are following suit. Taco Bell, for instance, launched a “Taco Subscription Service” on its app, giving customers a taco every day for 30 days for the price of US$10.

RELATED: When it comes to customer loyalty, mobile apps are the key to the lock

Even older loyalty programs are seeing strong demand. Starbucks saw strong growth for its loyalty program in Q4 2021 and now has 26 million members.

It’s easier than ever for restaurants to get data from orders to make future decisions, and that is paying dividends.


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