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Subway strikes national delivery deal with Uber Eats

Subway on Monday announced a strategic partnership with Uber Eats, making it the latest national quick-service restaurant (QSR) business to embrace third-party delivery apps.

The deal will see more than 700 Subway restaurants offer on-demand delivery, as the company seeks to tap into the growing demand for convenience.

“With almost 14,000 searches on the Uber Eats app for ‘sandwiches’ each month, we know Subway delivery will be a game-changer for Subway fans,” Kate Brody, Subway ANZ director of marketing, said.

This is in line with a spate of national QSR chains, including McDonald’s, Hungry Jack’s and KFC, that have started offering delivery of online food orders through third-party apps like Uber Eats, Deliveroo and Menulog.

While delivery traditionally has been viewed by restaurants and consumers as a time-saving option for dinner, the ease of ordering through smartphones and ability to scale delivery fleets through the gig economy have redefined delivery for any time of the day.

According to Uber Eats, the number of lunch orders on the app more than doubled in 2018, which is just one more reason that delivery has become an attractive proposition for QSR chains like Subway.

While some restaurants have highlighted the large cut that such delivery platforms charge, Subway ANZ country director Geoff Cockerill told IR in a previous interview that they are definitely a win.

“There is a cost to it, but you can price your menu items accordingly. People purchasing products on third-party delivery apps are prepared to pay more than they are for normal menu items,” he said.

“If a menu item costs $10 and the delivery platform charges [the restaurant] a fee of 30 per cent – I’m making up these numbers – you would price your product somewhere in between. If you price it at $13, you’re probably going to lose your guest, but if you price it somewhere in the middle of $10 and $13, you’re likely to drive a profit because you’re utilising the resources you already have in the restaurant.

“What you’ve also got to remember is that it doesn’t matter if we’re a firm believer in this or if the restaurant is, it’s what the guests want. They want it now, so either you’re in it, or you’re not, and our view is you need to be in it.”

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