Others, like McDonald's (MCD) , have been forced to adapt as well. While Starbucks (SBUX) may have led the way in mobile as then-CEO Howard Schultz saw the big retail shift coming head on, others have begun to catch up as well.
Behind the leadership of CEO Steve Easterbrook, one of those companies has been McDonald's. One of the more recent initiatives gaining some buzz? Delivery.
In any regard, Barish estimates that McDonald's will rollout delivery to 5,000 U.S. stores by year-end 2017. In 2018, the company will add an additional 2,000 stores and in 2019, it will add another 3,000, bringing its U.S. total to 10,000 locations offering delivery.
By that time, he also expects 14,000 U.S. locations to offer mobile ordering as well.
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While mobile order and delivery is something new for McDonald's in the U.S., its concept is not unfamiliar. CEO Steve Easterbrook is very good at implementing strategies around the world and this is another prime example of that. As Barish points out in his note, McDonald's already does about $1 billion worth of delivery sales in the Middle East and Asia. Given that 75% of the U.S. lives within 3 miles of a McDonald's, the country is ripe with potential.
Although McDonald's has experimented with other third-party delivery companies, it will work exclusively with UberEats on the project. UberEats will charge $4.99 per order, plus some sort of commission on McDonald's. Barish says this will likely fall on the lower side of the 20% to 30% fee, given McDonald's exclusive usage of UberEats.
In his estimations, Barish believes delivery will add 0.5% to the company's same-store sales this year and 110 basis points to its 2018 same-store sales. Barish calls for 3% same-store sales growth in 2018 and 2019 on the back of new initiatives like delivery. His upside case calls for 4% same-store sales growth in 2018 and 2019.
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