Yum Brands Going 100% Digital, Compare its Q3
DoorDash says tip, or else! NYC e-bike laws
We hope last night’s sugar rush gave you the stamina for today’s financial results, because we’ve got some interesting quarterly reports from Yum Brands, Brinker, Denny’s and Wingstop. Plus, DoorDash is making some big changes to tipping and NYC is considering some momentous delivery e-bike regulations.
Modern Delivery will be off on Thursday, returning Friday.
Today:
Which Restaurant Giant Had the Yummiest Quarter?
DoorDash Pushes Tips
Chart Time | Resto Stocks Diverge
NYC Mulls New Certifications for Delivery E-bikes, Batteries
FINANCE | Yum Brands Going “100%” Digital, Posts Wobbly Q3
Yum Brands showed off some mixed Q3 financial results, as the quick serve giant’s Pizza Hut chain showed poor same-store sales growth, and KFC / Pizza Hut sales in China softened. Overall, worldwide system sales, excluding foreign currency translation, grew 10%, with a 6% growth in both same-store sales growth and units. Taco Bell performed strongly, with same store sales up 8%, but that chain has a much weaker international presence than its brethren. Revenue came in at $1.71 billion vs. the $1.77 billion expected. (See Q2 results here.)
The Big Picture: Yum execs aren’t sitting on their laurels, and are instead pushing to have “100% of sales powered by digital,” including integrating in “new AI-driven capabilities.” Other restaurant giants have different plans to restore flagging growth. Denny’s, which saw profit drop 54%, is doubling down on virtual brands. It’s hoping to take its in-house Bandas Burrito concept from 10 units to 80 in a month’s time, and is also testing a partnership with virtual brand licensee Franklin Junction. Brinker (Chili’s, Maggiano’s) saw revenue up 5.9% to $1.002 billion, as it *de-emphasized* its virtual brands, leading to higher menu pricing. And wing-slinger Wingstop saw digital sales rise to 66.9% as revenue grew to $117.1 million from $92.7 million the year prior.
PRODUCT | DoorDash Says Tip, or Else!
Well, that’s quite the nudge. DoorDash is now warning users that their food might get cold if they don’t leave a tip for their dashers. Users that enter $0 in the tip field will now see a popup alerting them that “Orders with no tip might take longer to get delivered — are you sure you want to continue? Dashers can pick and choose which orders they want to do. Orders that take longer to be accepted by Dashers tend to result in slower delivery.” DoorDash seems to be still testing this function, as reporters have noted seeing it in markets in the Northeast, but not the South.
The Big Picture: DoorDash restructured is payments in 2019, giving drivers a base pay rate plus 100% of tips. With Dashers working as independent contractors, they’re free to accept or reject a given order, meaning those with lucrative tips are less likely to get accepted. Woe be unto the user that wants to tip *after* the service is performed. This isn’t the only big tipping update of the week — Bepo, an embedded digital tipping platform, announced it’s signed on Canada’s StoretoDoor as a new partner, meaning delivery workers will be able to receive tips post-service.
CHART TIME | Restaurant Stocks Diverge
Let’s check in with all the restaurants we mentioned in the first story — their stocks are moving in wildly different directions this afternoon. While Yum Brands is up slightly by 0.9% (light blue,) its Chinese spin-out (black) is down a whopping 18.8%. Wingstop (orange) is up an impressive 11%, Brinker (green) is up 4.6% and Denny’s (dark blue) is down 2.1%.
POLICY | NYC Mulls Requiring Certified Ebikes, Batteries
New York City’s City Council is contemplating a new bill that would require third-party delivery apps to provide workers access to certified e-bikes and e-bike batteries. Another bill in the works would require workers to take an e-bike safety course, to be developed by the city’s DOT. And yet another bill, introduced last week, would require e-bike or electric scooter businesses to obtain a city license.
The Big Picture: NYC has been at the forefront of these regulatory issues, having recently required e-bikes sold in the city to be UL certified. The issue will of course come down to enforcement, as many workers cannot afford higher end bikes, or have to use charging hubs where batteries may be plugged into the wrong charger (an issue exacerbated by some landlords banning ebikes.) NYC has also of course taken a number of regulatory actions towards 3PDs, such as its $18/hr minimum wage for delivery workers. Should these latest bills pass, expect this to be a boon for bike leasers like Whizz and JOCO, who UE, DD and GH are likely to point riders towards.
A Few Good Links
DisplayRide releases new body camera for gig workers. Walmart rolling out 30 minute delivery for holidays. Panera cuts staff as it plans IPO. Toast rolls out mobile restaurant manager. PublicSquare debuts anti-woke “patriotic” ecommerce platform - lol. Hyundai green vehicle sales up 49% YoY. Subway gives away membership points in bid for more loyalty app users. 7-Eleven rolls out new brands. Target’s turn to push Thanksgiving deals. New research shows that retail theft is a non issue, mostly serves as political grandstanding by chains. TGI Fridays CEO resigns after two months on the job, evidently he found serving sushi to be too desperate. Replay of our webinar on delivery fees.
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