To Stay Competitive, Major Restaurants Know They Must Deliver (Literally)
Nowadays, when people get hungry, instead of heading to their refrigerator, they often turn to their computer – or better yet, their smartphone – looking for food delivery. And if they can’t find it from the specific restaurant of their choice, plenty of others are willing to scoop up that business. Thanks to this growing demand for convenience from customers, delivery might actually be the biggest trend in restaurants today.
According to Nation’s Restaurant News, over 80 percent of publicly traded restaurant chains are at least experimenting with delivery right now – and that doesn’t even included pizza chains, which weren’t taken into account since delivery has been a long-standing part of their business plan. Additionally, the site suggests that the few delivery holdouts are mostly upscale steakhouse chains – places where delivery isn’t part of the allure – meaning that “nearly every publicly traded company where delivery could make sense are at least examining the service.” That’s a bold statement, and definitely a shift: It’s only been the past couple year where we’ve been seeing delivery introduced by major brands like Starbucks (which began delivery in 2015) and McDonald’s (which began focusing on delivery last year). Nation’s Restaurant News went so far as to call delivery “one of the fastest-moving trends in industry history. If not the fastest.”
But though for customers, delivery service fulfills all of their lazy (possibly hungover) dreams, for restaurants, adding this additional amenity can create all sorts of potential problems, especially because delivery comes in many forms. Restaurants can operate their own delivery service, but handling everything from processing orders online to hiring drivers on the ground carries a lot of overhead. Some services, like the most popular food delivery site GrubHub, can handle the ordering side of the business, but take a significant cut (usually between 15 to 23 percent) for their efforts. Other services, such as UberEats, are built around the idea that they can handle both ordering and delivery, but then a restaurant is entrusting their food with drivers who aren’t directly under their supervision. In the end, all forms of delivery are a difficult balance of risk and reward.
Still, restaurants are willing and possibly even find it necessary to take this risk. One market research group found that delivery traffic was up in the first quarter of 2017 while overall business at restaurants remained steady. The implication: Delivery is growing, so either toss your food onto the bandwagon or get left behind.