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This week, QSR giants McDonald’s and Domino’s are hosting investor days, highlighting their emphasis on digital strategies. Today, McDonald’s spoke to their “Accelerating the Arches” campaign, focusing on intensifying efforts in the “3Ds” – Delivery, Digital, and Drive Thru. Domino’s is also expected to discuss digital initiatives during their investor day tomorrow. Mobile user data gives insight into the success of these strategies:

  • McDonald’s: churn of ~30% is far lower than direct competitors in fast food, which average MAU churn of 43%.
  • Domino’s: churn averaged 46% in October, down -8pts Y/Y and the lowest of the pizza group. Domino’s fall in churn coincides with the launch of the new Domino’s Rewards program on 9/1/23.
  • As a group, coffee chains have the lowest churn at 33%, while pizza chains exhibit the highest churn at 56%.

McDonald’s announced their latest restaurant concept, CosMc, a coffee/specialty drinks/snacks format that is likely to compete with industry giants such as Starbucks, Dunkin’, and Dutch Bros. This move is a continuation of McDonald’s broader digital initiative to drive customer frequency, especially among loyalty program members, and leverage their competitive advantages in the fast-food industry, including lower mobile churn rate compared to competitors in QSR. 

Apptopia data indicates a pattern of high engagement and low churn associated with mobile app users within coffee & specialty drinks chains. As a result, CosMc represents an adjacent restaurant vertical opportunity in which McDonald’s has a good chance to replicate their industry-leading digital unit economics (low churn). It also represents a huge opportunity to further leverage McDonald’s mobile data-based understanding of their customer base to grow wallet share and retain users.

Dominos churn is down 8% Y/Y, and is lower than competitors in the pizza delivery market. The decline in churn over the past two months aligns with the roll-out of Domino’s new loyalty program, suggesting a positive impact on customer engagement. We will be interested to see if Domino’s management outlines further strategies to increase mobile engagement in presentations tomorrow.

View engagement for Food Delivery apps in our ‘Instacart Investment Opportunity’ report.

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