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Wingstop (WING) & DoorDash Tie Up for On-Demand Delivery

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Wingstop Inc. (WING - Free Report) has partnered with technology company DoorDash for market by market rollout of delivery services. This national delivery plan was first launched in the Los Angeles as well as Houston markets. The company has already completed the delivery test in Las Vegas, Chicago, Austin and Denver. Following the news, shares of the company increased 1.5% on Nov 26.

A glimpse at the company’s share price performance also reveals that it has outperformed the industry in the past six months. The stock has surged 31.9% compared with the industry’s 10% growth.

Notably, this Zacks Rank #3 (Hold) company is providing free delivery in Los Angeles from Nov 26 to Dec 2. In Houston, delivery will begin from Nov 28 and both the company will offer free delivery starting Dec 10 to 16. By the end of 2019, Wingstop is planning to rollout deliver to 80% of the company system. As of Sep 29, 2018, the company operated and franchised above 1,200 restaurants in the United States, Mexico, Singapore, the Philippines, Indonesia, the United Arab Emirates, Malaysia, Saudi Arabia, and Colombia.

Currently, DoorDash, which connects customers with their favorite local and national businesses in more than 1,800 cities across the United States and Canada through door-to-door delivery, has similar partnerships with the likes of Dunkin' Brands Group, Inc. (DNKN - Free Report) , Jack in the Box Inc. (JACK - Free Report) and The Wendy's Company (WEN - Free Report) .

Digitalization Need of the Hour

With Internet, digitalization and electronics touching every facet of our day-to-day lives, it is obvious that the restaurant industry has embraced this trend.

Per The NPD Group, foodservice delivery has contributed significantly to restaurant sales over the past five years. The increase of 20% in delivery sales were primarily supported by digital ordering. As a result, digital sales are no longer a luxurious feature but are the dire need of the hour.

Moreover, Morgan Stanley predicts the food delivery industry could account for 11% of all restaurant sales by 2020.

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