Delivery Hero & McDonald's Deliver Mixed Results in 2023
Rappi's workers revolt, Amazon sales surge
Before today’s news, a bit of housekeeping: Modern Delivery will temporarily be switching to a Monday, Wednesday, Friday schedule. We’re a small team here at Modern Delivery & Curbivore, and it’s all hands on deck as we build out the industry’s most interesting conference — Curbivore — which returns to DTLA March 28th & 29th. So we’ll be spending less time curating the news, and more time setting amazing innovators up to break the news, through late March.
Now, on this rainy day we’re raining on McDonald’s and Delivery Hero’s earnings parade, while things are looking great at Amazon (of course) and not so great at Rappi. Let’s get to it!
Today:
Loyalty Customers Save McDonald’s 2023
Market Unimpressed by Delivery Hero’s Early Results
Chart Time | Amazon Keeps Growing
Rappi & Rappitenderos Fight Over Ombudsman
FINANCE | Loyalty Customers Push McDonald’s Sales Up 9%
McDonald’s put away the muscle car on put on its white collar shirt, with the burger giant reporting its Full Year 2023 financial results. Comparable sales were up 9% for the year, although that slowed down to just 4.3% in the fourth quarter, with war in the Middle East weighing down on its international markets. Overall revenue for the year came in at $25.5 billion, while operating income rose 24% to $11.6B — that’s a lot of Big Macs!
The Big Picture: McDonald’s is seeing big results from its loyalty program, which grew 45% YoY. Loyalty related sales climbed to $20 billion for the year, across the company’s 50 most important markets. Overall, Mickey D’s saw sales rise on the back of higher menu prices, not more foot traffic; that’s having the second order effect of driving away some lower income customers. The company hopes a push to its Dollar 1, 2, 3 program will bring consumers making under $45k per year back to the Golden Arches. And while we’re speaking about green, do note the company is bringing back its Shamrock Shake (first introduced in 1967 by a Connecticut franchisee, to commemorate St. Patty’s Day.)
FINANCE | Delivery Hero GMV Climbs A Paltry 1.5%
Hoping to turn around a battered stock price, Delivery Hero released preliminary financial results a week ahead of schedule. The company said FY 23 GMV climbed just 1.5% to 45.2 billion euros ($48.5B USD,) down from 17.5% growth the year prior. The company’s push to improve margins and take rate is showing promise however, with revenue up a meatier 9.1% to €$10.5B and Adjusted EBITDA topping €250M. The Berlin-based 3PD saw results really vary by market: Asia was down 2%, MENA jumped 21.7%, Europe rose 15%, the Americas fell 4.5% and Integrated Verticals (quick commerce / Dmarts) climbed 20%.
The Big Picture: The company’s stock has been on a slow downhill trajectory since early last year, but the price fell a whopping 25% on Friday on the news that its efforts to sell Foodpanda, its Asian subsidiary, had failed. While the company denied the rumors, evidently it felt it needed a bigger reset to the narrative. Even though that €$10.5B of revenue beat analysts’ consensus by half a billion, today’s stock performance was very choppy, with it finally closing up a few pennies. For 2024, DH is expecting GMV to grow 7-9%, revenue to climb 15-17% and Adjusted EBITDA to hit €725-775 million; let’s see if all those numbers look the same when audited results are released on the 14th.
CHART TIME | Amazon Sales Surge As Delivery Speeds Rise
Amazon just put on a sales clinic, closing out 2023 with $574.8 billion in revenue, more than double its sales from just four years ago. “This Q4 was a record-breaking Holiday shopping season and closed out a robust 2023 for Amazon,” said Andy Jassy, Amazon CEO. “While we made meaningful revenue, operating income, and free cash flow progress, what we’re most pleased with is the continued invention and customer experience improvements across our businesses. The regionalization of our U.S. fulfillment network led to our fastest-ever delivery speeds for Prime members while also lowering our cost to serve…”
LABOR | Rappi Workers Unhappy with “Neutral” Mediator
LatAm super-app Rappi’s workers are grumbling that “Defensoría al Repartidor,” an entity set up to mediate issues between the company and its workforce, lacks the autonomy to really do its job. While the mediator is meant to improve gender and migrant work issues, delivery workers are most interested in its help with account cancellation and fee / debt adjustments. At Rappi, workers can be fined for not completing deliveries, even if the issue is caused by the customer; many complain that while Defensoría al Repartidor will delete the debt, Rappi will later reinstate it.
The Big Picture: DAR was created last October, meant to alleviate its 150,000 Colombian delivery workers’ concerns. But given that DAR members are paid employees of Rappi, worker advocates are concerned the supposed ombudsman is toothless. “As long as it’s not autonomous, it’s not going to take off,” said Jhonniell Colina, vice president of platform worker union Unidapp. “I feel like it’s a form of ‘fairwashing,’” added Derly Yohanna Sánchez, a principal investigator at Fairwork Colombia.
A Few Good Links
President Biden demands grocers stop ripping people off. Instacart pulls AI-generated food images. New York State to replace I-81 with boulevard. Burger King wants you to redesign the Whopper. Sweetgreen names new COO. Uber Freight unveils new API. FedEx shares details on fdx digital platform. Logistics / carrier player Ruan cuts heads. BentoBox unveils new marketing and commerce tools.
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