Burger King UK: Offline to Online Food Delivery

Could you describe Burger King UK in terms of the store count and sales per store?

Burger King in the UK has approximately 500 restaurants, 200 of which are in travel locations like railway stations and motorways and the balance are more traditional and are elsewhere. I cannot give specific sales data but we are currently opening drive throughs which is working well. We will open a significant number of new restaurants in 2021 and are happy with our situation and the way the market is moving.

Is the drive through a traditional model for non-digital orders only?

No, we will also deliver from the drive throughs. QSR historically had takeaway, dine in and drive through but, over the past five years, the change to digital has been extraordinary. Not only incremental delivery volume but kiosks, loyalty, click and collect, curbside and digital menu boards. With this layered complexity, businesses are challenged to keep up with consumers.

Have you seen that digital mix change from pre- COVID until today?

We were clearly marching toward digital before COVID. We bought the UK master franchise for Burger King only three and a half years ago and inherited many legacy systems. I am not making excuses, but changing legacy systems to contemporary applications is challenging. The most significant change for us over the past year has been the extraordinary growth of delivery. It is very unprofitable for us from a percentage margin point of view, but it is revitalizing our high streets which we previously thought were potentially dead and buried.

You have to embrace both digital and delivery. You have to find more profitable ways such as white label delivery or click and collect. You have to embrace them all because, if they are not coming to you, they will go to other people.

What is your current delivery strategy?

We are currently with all three aggregators. We have very good relationships and work individually with aggregators who offer exclusives, new product launches and promotions. From a delivery point of view, we try to talk to the consumers very regularly. We try to offer our customers either something new, reduced or some other hook to drive that frequency. We would like to talk to them on a monthly basis without shouting and the delivery aggregators support us. We do joint investment because when we drive volume, the aggregators benefit.

Are some products on offer or exclusive to a different platform each month?

Yes and that is not giving away any secrets because most people work like that. Our preference is to maintain healthy relationships with all three aggregators to stop them fighting. All those businesses are run extremely well and we get on and work well with their teams.

Does it not make sense to be exclusive to one vendor and get a better fee?

That is a fairly circular question. Currently definitely not, due to the volumes. The lack of cannibalization between aggregators would mean impossibly low exclusivity fees. If that changes between aggregators we might go back. I have been exclusive with Deliveroo at GBK for a period of time so I am not averse to that at all. You can also offer time-limited or tactical exclusivities to aggregators. You can give them an advantage for a period of time or a specific thing.

Such as marketing or products which can shift the demand?

Yes.

It is interesting how these aggregators actually have different customer bases. I use all three of the apps and I would think that most people use more than one but it does seem as if they don’t cannibalize each other too much?

They do cannibalize each other but I will not go into how much that is. By the same token we all have certain apps. If I look at my use of the railways, I probably have one app on my phone versus the three or four which all offer an equally good service. I tend to go back to that app because I do not want all four. From an aggregator brand point of view, Just Eat might be stronger in one part of the country whereas Deliveroo is stronger in another.

A restaurant wants to maximize their access to customers to fill the funnel so it does make sense to work with all three of them?

It currently suits us but the last year has taught everyone to be agile. You cannot sit down and say, tell me the exact rules and what the government will do because they do not know. You have to be a bit fleet of foot and if you are, you will likely be more successful rather than less.

What do you think about owning your own delivery and going direct?