Jack in the Box Inc. (JACK) stock continues its rally this week, rising 0.35% in early morning trade on Thursday following the announcement that the company signed a delivery deal with DoorDash Inc. DoorDash, a home delivery service, will expand Jack in the Box’s offerings to homes, adding delivery services to 600 stores in the United States.
Jack in the Box Inc. (JACK) Expansion into 200 Cities
The deal includes locations in 200 cities and is more efficient than doing delivery in-house, according to reports.
Jack and DoorDash worked together in San Francisco to test out the service. The new deal allows the service to cover 40% of Jack in the Box locations. Consumers are choosing convience over going to ground locations, according to reports.
Delivery is up 7% in 2016, with delivery increasing most for restaurants not including pizza delivery.
McDonald’s (MCD) is also testing out delivery services in an effort to retain market share. The fast food giant calls fast food delivery a $100 billion opportunity and has partnered with UberEats to deliver food in Florida. The company plans to expand its initial testing to other parts of the United States, utilizing several delivery services in the process.
Restaurant partnerships with delivery services cost a 10% to 30% commission on average. There are delivery services that add their own delivery fees that are charged to consumers, too.
Third-party services, like DoorDash, own their consumer’s data. This has lead to a downfall for large fast food chains that want to use delivery data to predict trends. Panera Bread (PNRA) chose to build their own delivery network as a result of the data loss and to maintain greater control over their food quality and delivery times.
Jack in the Box Inc. (JACK) plans to offer the company’s Late Night Menu to consumers to allow late night ordering. DoorDash will also offer the company’s standard food offering as well as brunch.