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MONDAY MINUTE: December 19, 2022

A $1.2 Billion Gorilla, McDonalds app test results, and do higher tips equal to faster deliveries? All these headlines and more represent our thoughts and views on the world of restaurants, technology and off premise food in our round up of the last week’s hot news stories - subscribe today to the Monday Minute and register at for more bonus content.


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Carl: A 1.2 billion gorilla, McDonald's app test results and do higher tips equal faster deliveries. Happy holidays. This is your Monday Minute.

Ho ho ho Meredith. How are you today?

Meredith: Oh, very Merry

Carl: Been very festive? Excellent. I like the hat. Very nice. I've got these on. I'm not sure whether they're helping me appear or not, but I appreciate the opportunity for us to celebrate a bit of these festive tidings. We've got a bunch to cover lots in the news in the last few weeks.

Meredith: I know this is a tough week to pick what to talk about lots.

Carl: There's gonna be in our newsletter that we send out on LinkedIn, a bunch of other articles that didn't make it. But let's start with McDonald's because they've been making big inroads into the first party space this year and they've shared some of the results from their first party platform.

What do you want to tell us?

Meredith: Yeah. Wow. A very interesting article and I think the thing that grabbed me right away was that they said their loyalty program had 25 million active app members in the previous 90 days. And the thing that got me about that was, I'm pretty sure they only launched this like 18 months ago in 2021, and that number is almost as high as Starbucks at 28.7 million and Chipotle at 30 million.

Now, Starbucks has been in this space the longest, launched their app and loyalty program first, and, Chipotle of course, just, firing on all cylinders. So what this tells me is that, while someone like McDonald's might have been a little bit behind in getting into the digital game when the sleeping giant wakes up. Wow. And they put their mind to something. They just make it happen. Really, really incredible.

And then the article goes on to talk about the fact that these customers are more profitable than other customers which of course is not surprising because if you are using the app to get them to order digitally, digital ordering frequently has higher check.

And then they're also able to incentivize different behavior that they want to see. So, really just went from nowhere to front and center On the loyalty front, so nice job McDonald's.

Carl: Very good. One of the things that also stood out for me, Meredith, was the, the reduction of their menu. Did you see that piece in the article?

Meredith: I did see that, but yeah, I think, I feel like everyone did that over Covid.

Carl: Yeah, I think, I think they did, but it just shows you that if a, if a major player like McDonald's also sees the value of really working on the interface of the user experience and not putting the bells and whistles of the LTOs front and center, it just shows that they're really focused on that first.

And I think that's a lesson that every restaurant can learn from.

Meredith: Yeah, absolutely. Okay. Second question to you. So tis the season as you can see from my hat and your beautiful light necklace like this. So around this time of year, we all start thinking about gift cards. I know I myself just purchased some restaurant gift cards [00:03:00] for friends and family.

Carl: Excellent thanks very much in advance. I appreciate that .

Meredith: Look for it in the mail, Carl. So, uh, what I thought was interesting about this article is that a virtual brand has gotten in the game. Tell us more.

Carl: Yes. Um, well first of all, thank you to Stephanie Sollar, who's the CEO of Virtual Dining Concepts, and it goes to show that if you do reach out to Meredith and I, sometimes we'll include your articles in the Monday Minute because Stephanie told me about one of her brands, Mr. Beast Burger, getting into the gift card game and really interesting space. Now you're right to say that this is the time of year when people start to think about gift cards. But actually Meredith, maybe it's more about the Thanksgiving weekend in particular. I'll share some information on that in a moment.

First of all, in this article, Credit Suisse have a few numbers. It says that half of the gift card sales happen in this quarter, and 40% of them are redeemed. in the first quarter of next year, so January through March, 40% of those purchased in the preceding three months get purchased, and then another agency, [00:04:00] Givex says that 51% of Americans are planning to spend at least a hundred dollars in gift cards this year and that 44% of people that receive them would like those gift cards to be restaurant gift cards. So that's really encouraging. Also in the same article, Paytronix revealed some information about then this Thanksgiving weekend, and if you're not in the restaurant gift card game, maybe you've missed the opportunity because it certainly seems that Cyber Monday now is the main day when sales actually happen for gift cards, they were up on 2021, but the actual overall amount of gift cards over the Thanksgiving weekend was down about 7%.

Intriguingly, despite the inflationary environment that we're in, people are loading up more than they were last year, about 8% higher. What people are loading up onto their gift cards. And actually on Black Friday itself, it was up 19% on the previous year. Last thing I'll mention is that digital cards are also on the increase.

So these are these cards that aren't necessarily physical in nature. It's something that gets emailed to someone. And there are 31% of last year. And [00:05:00] Paytronix Chief Data Officer Lee Barnes, says that this of course has been informed by the pandemic and that I think has sustained on in this post pandemic era.

So really interesting stuff there. Now, if you're not interested in getting a gift card for your friends and family or anyone in the rational, then maybe take a look at this book.

And even if you say, we're holding a second, Carl, I've already bought your book. Then. Good news folks. We have a new book coming out next month. It's going to be on Amazon. It's called Delivering the Digital Restaurant, The Path to Digital Maturity. So if you're feeling like getting someone a New Year's present, then certainly check out the book. We'll reveal more

so everyone registered on our websites, and of course here on the Monday Minute when the book is out and published. But, uh, looking forward to that one coming out soon. Let's get back to things. Meredith. Uh, the, the next question that we've got for you here is a very interesting one cuz you know, you and I are [00:06:00] often on the side of the drivers and their, their role in the delivery ecosystem.

Really interesting article this week, which, which was saying that Tipping actually has a role to play when it comes to the speed of delivery.

Meredith: Yeah, I, you know, it's very logical when you read through it and you hear the drivers' rationales for what they're talking about which is that they don't get paid that much per delivery by the ride share companies themselves.

And therefore the tips are really what make up their earnings because they get to keep all of that. And so they look for things not surprising that are nearby and that they believe will be a high basket size. Because higher basket size is correlated with a higher tip. So these smart drivers out there, they know what to look for, they know what they're doing.

But I think I would broaden this article out a little bit to say that, delivery is really only going to make sense when we improve the network economics of delivery. And there are three different ways to do that. One [00:07:00] is automation. There was also an article this week about Uber testing delivery robots in Miami.

One certainly is putting the economics on the consumer in the form of tips as we just talked about, or in the form of delivery fees. And the third is actually improving the network efficiency overall. I'm sure many of you have heard me tell this story back in the days when I was a consultant, I had a delivery company as a client, and the whole thing was about the number of stops per hour and how many drops per stop. And so it was really about the routing efficiency and getting the drivers to do as many deliveries as they could possibly do during an hour. And that matters, right? If you've got a DoorDash driver doing one to two, maybe just over two deliveries an hour, that means they're only getting the tips associated with those two deliveries an hour.

No matter how big a basket, not that great, but if you could get them to 3, 4, 5, 6 deliveries an hour, then of course they would make more money. And we see drivers doing this already themselves. I know. Carl, you forwarded me a website for a company that's trying to figure out how to help drivers do what we call self batching.

And that's where they're operating on multiple different platforms at the same time. I'm sure many of you have had this experience where you order something for delivery and it says it's going to be there in a certain amount of time and it doesn't show up. And it doesn't show up. And you start tracking your driver on the app and you notice are going a whole bunch of places that are not the restaurant you ordered from, nor your house.

So this really is a challenge that needs to be solved in order to make delivery economically efficient, profitable and scalable for everyone in the ecosystem, whether it's the consumer, the driver, the restaurant, or the delivery company.

Okay, Carl next question is back over to you, Getir acquired gorillas. So tell us about that.

Carl: Yeah. It didn't get a huge amount of airtime over here in the US at least clearly big, big players in the ultra fast grocery segment over in Europe.

Getir is a Turkish based company, Gorillas over in Germany and the broader group is now valued from different sources I see between like $9 and $10 billion. Quite a big deal, right? That does represent about a 61% reduction for Getir and a 15% reduction for Gorillas in their previous valuation.

Now, bear in my Meredith Getir was valued at nearly 12 billion in March when it raised 800 million. Right? . So, wow. Quite, quite interesting stuff. Brittain Ladd, who is a big influencer in this space, he, he believes this time next year, the valuation's gonna go down to $2 to 4 billion. So, you know, it, it says that there's definitely some consolidation happening.

in a post pandemic environment. Now that said, the investors in Gorillas such as Delivery Hero and Ten cent, they're getting paid 40 million in cash as part of this transaction. So hopefully there's some happy investors out there, there on the Gorillas side.

Given these two giants have come together, I fear probably a string of more layoffs probably coming down the line as well.

Given they have numerous hubs across Europe. Meanwhile Britain Ladd that I mentioned before that says, Getir, can't just take this for granted. And, and he, he believes that customers aren't so interested in what he calls the ultra fast aspect of it, but more they want precise deliveries. They want better assortment, they want lower prices.

And I'm really intrigued that he brought up the company Ocado, uh, which I'm used to using back in the UK because he says they are really the real story. And I, I really agree with him because it kind of ti ties back to your previous answer on, on delivery because they have 10,000 products, but 99% of those products that are in Ocado are picked via automation and they have 30 minute delivery windows.

But guess what? They also dynamically price the actual windows for delivery. So if you want a delivery at 5:00 PM at night, it could cost you a lot more than waiting until 10:00 PM at night when there perhaps are a few more drivers on the street. It's not as busy and you get a cheap or maybe even free delivery at that point.

And that lesson, I think is something that yes, for sure ultra fulfillment can learn from, but maybe the DoorDash and Uber Eats can learn from it as well. Okay. Last question. Now this time next, when is it? Two weeks from now, we're going to talk about our own predictions for 2023 and maybe look back on how good we were last year.

But there has been a lot in the trade press uh, from the industry, both from restaurants and restaurant tech providers and what they think 2023 is bringing. So, uh, I know you've been looking at some of these things, so what, what projections stood out to you?

Meredith: Yeah, well, everyone talking about technology moving into the back of house and I think this makes sense given the challenges that our industry has had with labor over the last couple of years that seem to be ongoing.

And I don't think we'll get relief from any time soon. It is really time for automation to come to the back of house and restaurant industry. So I'm gonna read one quote in full because I think it's a really good one. It's from Celeste Stevens, who is the KFC. Manager of digital customer experience and engage.

And she says, "back of house technology innovation to enable team member efficiency is going to be big. Fully connected. Kitchens that automate food prep and order fulfillment based on real-time demand, inventory levels and forecast will allow team members to focus on the most important parts of working in a restaurant serving incredible food with world-class hospitality." Now, I of course couldn't agree with that more given what I'm doing at Empowered Delivery which certainly does orchestrate what's going on in the back of house and make automation therefore a possibility. But you've got a lot of other folks talking about these theme things as well.

So, Sam Zeitz of Grubber, Gagn Sinha of, Inspire Brands and Raj Suri of Presto all believe that more AI in the back of house is going to enable the automation of mundane tasks. So that was definitely a big, big theme.

I also thought technology getting easier to use was a big theme. We talk a lot about how we went through this period of massive innovation and disruption in the restaurant industry which brought us so many neat and cool features and different ways of doing things, but, Also is a little overwhelming as you think about restaurateurs trying to deal with this absolute flood of new companies and new ideas and new ways of doing things.

Zach Goldstein of Thanx says automation and ease of use inside the tech platforms themselves. Will start to happen this year. His company, thanks already making a lot of that happen. Angela Diffley of the Restaurant Technology Network said even faster food will be table stakes. Wow. It seems like we already are impatient when our food takes longer than five minutes to get in the drive-through and longer than an hour to get via delivery.

But she's saying it will happen even faster. And I will conclude that with Chris Baggott of Cluster Truck and what he's talking about agrees very much with Jonathan Maze that the restaurant industry will bifurcate. And he says he thinks that more and more independent restaurants will open delivery centric kitchens.

But he also says dining rooms remain. Dining rooms, right? So he thinks we'll get a more clear divide between those two things. And I think that is what is really going to enable the table stakes that Angela Diffly is talking about. Anyway, there's tons of interesting things out there with folks prognosticating about what they think will happen, but those were some of my favorite.

Carl: Great stuff. Thank you as always, Meredith really enjoyed another year of Monday Minute with you. Happy holidays to you and the family. Happy holidays. Thank you always for everyone listening into us. Please do get in touch if you have any thoughts about today's articles, anything you'd like us to cover as we get into 2023 with the Monday Minute, we're obviously really looking forward to our book coming out and also keeping an eye on all the wonderful things happening in this great industry of ours.

But until next time, happy holidays and thanks for listening.

The Monday minute is available for you to follow and subscribe wherever you listen to your podcast. Watch us on YouTube and follow us on all our social media learn channels. Thanks for listening.

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