Yahoo Finance Taco Bell's home delivery experiment
Taco Bell (YUM) may soon be delivering to your doorstep.
The fast food chain is planning to test out a home delivery service this year. CEO Brian Niccol told Nation's Restaurant News that he hopes to make the company an “on-demand brand.”
“Even though it’s the No. 1 request from consumers, we have to make sure we can give them an experience that’s consistent with Taco Bell, and that’s what we’re working through,” Niccol said. “We have to figure it out, and I can tell you right now we don’t have it figured out.”
Yahoo Finance’s Aaron Task thinks this is a smart move.
“This is the world that we live in, it's instant gratification. The millennials and Generation Z…they want it when they want it,” he says. “It's probably the right thing for this business to at least experiment with.”
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Despite Niccol's expectations for home delivery demand, Yahoo Columnist Rick Newman doesn’t expect it to be particularly profitable.
“We're talking about companies where the value proposition is cheap food…So when you have to ask if delivering to individual addresses is expensive and when they start to figure out how we're going to pay for this, I think there is a chance the whole idea goes kerflooey.”
Other chains, such as Burger King and Panera (PNRA), are experimenting with delivery in select markets. Starbucks (SBUX) also recently announced it would add delivery service in Seattle and New York City’s Empire State Building. Task adds that it will be difficult to expand delivery service beyond small markets.
“Only the pizza industry has done [delivery] on a mass scale. Burger King is experimenting with this, Starbucks is looking into it. I think all these fast food companies think that they've got at least try and they will test…whether or not consumers will pay up yet for that service.”
Taco Bell also plans to experiment with opening units in shipping containers, incorporating environmentally friendly packaging, and increasing transparency about its food.
