I've also noticed that the economics of fast food make no sense anymore compared to groceries and casual restaurants. Inflation has hit everything, but fast food has not retained the relative discount.
A footlong basic chicken sub at a Subway near me is $13. A "Supreme Meats" is over $18. A "Beast" (whatever that is) is $21! All without a side or drink.
Taco Bell and Wendys are similarly out of my guilty pleasure rotation. The discount was part of the basic contract we had with bottom tier food.
What I've noticed is there there is a huge "app subsidy" (drive through tax?) for many fast food chains. For example, Taco Bell has a $6 online-only combo that's probably 40-60% discount over the drive-thru menu equivalent. I've noticed similar things with other chains as well.
As a business strategy, this makes some minor amount of sense since the app orders are transparently more efficient than drive through orders (say name and get food vs read menu and then "can I get uhhhhhh"). I also suspect online orders probably on average larger than drive up orders because it's easier to order more. On the other hand, there is very very minimal advertising of the app at the store. That sort of makes sense too - App orders probably have lower margin because the price sensitive customers are using it. So you don't want to steer your price insensitive customers to it if you don't have to. Overall, it's actually a nice case of price discrimination.
I can generally order anything I want, pickup or delivery, through GrubHub. Of course they track me; I pay them and they find me at home for delivery.
But I can also sit on a bus and order from the restaurant that's at my next stop, 20 minutes away. Google Maps has become great for this, actually. You find a restaurant and you hit the "Order" button, and there's a menu of choices for who to order from. You could GrubHub, DoorDash, Uber Eats, or you could order from the restaurant's website.
Restaurant websites have variable quality, mostly very poor, unless they're a franchise, or signed up with an aggregator, but hey, it's not an app.
Fair. To each their own. I didn't make an account to use <redacted>, and the convenience of putting in my order before I walk over there means it's ready when I get there so I have more time to enjoy eating it at the park nearby.
App subsidy / price discrimination is real. You can get $5 taco bell meals, $8 McD double quarter pounder meals, and $2 dunkin coffee and donut if you know where to look. They all then have rewards that is another 7-10% cash back.
Everyone's saying "they want you to use the app", but maybe it's also to overcharge people who just don't care or realize that they're wasting money. Older people who don't use their phone and just keep going to the same places out of routine, get the higher prices; while younger people and those who actually pay attention, instead of not eating there at all, get the lower prices.
I wonder whether their subsidizing the app orders to push users over: not just because they can presumably mine other data but because they can hire fewer cashiers and maybe keep their kitchen utilization up if there’s never a delay due to someone slow ahead of you in line. It would not be surprising to see a logical endpoint here treating the cash register like banks treated ATMs where there’s eventually a charge to talk to a person (who might be on video so they can farm it out to a call center?).
Another angle is moving money overseas. A few developers in Ireland subsidiary managing a mobile app which is licensed back to the parent American company and now every $1.00 in profit they siphon into licensing fees is taxed at 12.5% and not 35%.
Every decade or so they bribe US politicians to have a repatriation tax holiday to bring those dollars back home.
Sounds complicated but another likely reason they want you to use their app.
I suspect its more about market segmentation. Its a slight hassle to use the app and if you want those great deals you dont get much choice in what you can order at a discount - the discounted menu items rotate frequently.
So people who have more disposable income wont make a habit of using the steep in-app discounts and just order whatever they feel like eating at MSRP.
Growing up their jingle was "$5 foot long" (this lasted til 2011 or so?). I figured there was no way a $5 price held, but I did not expect it to have almost tripled.
That is insane. Publix subs (a Florida thing) are around $12 and the quality difference is not even comparable. How do these fast food places stay in business?
A footlong basic chicken sub at a Subway near me is $13. A "Supreme Meats" is over $18. A "Beast" (whatever that is) is $21! All without a side or drink.
Taco Bell and Wendys are similarly out of my guilty pleasure rotation. The discount was part of the basic contract we had with bottom tier food.