Fast Food News: McDonald's expands delivery, KFC nudges prices

Though this article is a little old, from Reuters we learn that McDonald's is expanding its delivery service, which we first wrote about way back when. Apparently, demand for home delivery was strong but the restaurants could only meet orders within walking distance. But now, after spending the past year outsourcing its delivery operations and investing in 300 motorcycles across its 42 locations, McDonald's is in a better position to compete with rival Yum! restaurants KFC and Pizza Hut, which have been delivering to customers for years.

McDonald's said last month it would ramp up store openings in China, with plans to open at least 125 restaurants this year and about 150 in 2009.

"For so many years, customers called into our stores to order food for delivery, but our staff were so busy and could only meet the needs of those within walking distance of five minutes," (Shanghai GM) Li said.

He said the company had spent a year preparing for home delivery in Shanghai, but gave no forecast for how much the service would contribute to sales.

Speaking of KFC, expect to see some price increases as the popular chain starts passing some of its spiking food costs onto its customers. According to China Daily, certain products like hamburger and breakfast food will see price increases ranging from 0.5 to 1.5 RMB. Last year saw inflation greatly affect food prices, which rose 12.3% from the previous year. 2008 is off to an even more inflated start, with February alone seeing a 23% price jump. Yikes!

"We will try to keep the prices stable if we can still bear the burden of rising costs," said Sarah Bai, a public relations personnel of KFC. This is the first time the fast food chain has raised its price this year. Another major fast food chain, MacDonald's, raised prices of some of its product in January following another round of hikes last October.

"Paying 13.5 yuan for a hamburger seems too much," said Jin Jing, a 26-year-old legal professional in Beijing. "But that will not influence my choice since prices in other restaurants are also increasing."

Eric Hu is Shanghaiist's Food Editor. Email tips, recommendations, and news and gossip about Shanghai's food scene to food at shanghaiist.com.