BROOKLYN, N.Y.—To recover some delivery costs, fast-food restaurants have upped the menu prices for delivery orders by 15.3%, according to an analysis by Gordon Haskett, Business Insider reports.
With the coronavirus pandemic triggering an explosion of food deliveries from restaurants, chains such as Chick-fil-A, Starbucks and McDonald’s have increased the cost for menu items ordered for delivery before tips or any additional associated fees. For example, a Chick-fil-A chicken sandwich at a Brooklyn, New York, location costs $6.85 on the delivery menu but costs $5.29 on the pickup menu.
Fast-food chains are raising prices to recoup the fees eaten up by third-party delivery companies like Uber Eats, DoorDash and GrubHub. These restaurants point out that delivery company fees and commissions make it harder for the eateries to make a profit.
Analyst Jeff Farmer’s report noted Chick-fil-A’s menu strategy shows “that concepts with strong customer affinity/loyalty have sizeable delivery pricing power.” Customers don’t mind paying more for Starbucks, McDonald’s or Chick-fil-A deliveries because customers have loyalty and affinity for those chains.
However, fast-food chains often have higher delivery premiums on average than fast-casual chains. Panera and Noodles & Co. hike delivery menu prices an average of 12.6%, while casual-dining chains like Applebee’s, Chili’s and Outback either don’t jack up delivery menu prices or only raise them a little (on average, 2.9%).
NACS has compiled resources to help the convenience retail community navigate the COVID-19 crisis. For news updates and guidance, visit our coronavirus resources page.