Fast food giant McDonald’s has announced plans to trial a new delivery service in the UK and Northern Ireland, in a bid to meet the growing demand for the added convenience of home delivery. The company has already rolled out this service in some overseas markets, including parts of US, Asia and Middle East, with delivery sales reported at $1 billion over 2016 signalling scope for future growth.
Smartphone ownership driving growth of home delivery
The high usage of smartphones devices has aided the expansion of online delivery services in Island of Ireland. Deliveroo is a key player in this market with the food delivery franchise now working with 40 restaurant partner in Belfast alone. As Mintel’s Online and Mobile Retailing Ireland 2017 report shows, the value of online retail sales is estimated to grow by 18% on an all-Ireland basis between 2016 and 2017, taking the value of the market to €10.2 billion. Opportunities therefore exist for fast food outlets to capitalise on this and invest in their delivery options.
McDonald’s is performing well in Ireland, having opened its 90th Irish restaurant in East Wall Road in Dublin, and operating 26 outlets in NI. With this footprint, Mintel believes the fast food chain has the potential to be a formidable player in the home delivery market. Mintel’s upcoming Quick Service Restaurants report shows that 36% of NI and 28% of RoI consumers have bought McDonalds take-away in the last month (April 2017) with over one third of NI and RoI consumers choosing to eat in McDonalds reflecting the popularity of the fast food chain across the Island of Ireland.
What we think
The home delivery service in Ireland will continue to grow as rising smartphone technology usage means that consumers have come to expect greater levels of convenience and accessibility in the foodservice industry. A key challenge to this service will be competition from other online delivery apps. However, with Irish consumers showing a strong preference towards McDonald’s, Mintel believes the service will perform well in Northern Ireland.
Aisling Kearney is a Research Analyst with a MSc (Hons) in Sustainable Development. Upon joining Mintel in 2015 Aisling has been involved in the production of market intelligence reports covering a range of sectors including food and drink, lifestyles and retail.