Food Delivery: How Independent Restaurants Are Responding to this Rapidly Growing Trend
Dining in is quickly becoming the new dining out. Studies show that dinner purchases from restaurants are increasingly consumed at home. In 2013, restaurant meals consumed at home was 33%, now it's over 50% and growing daily! What's even more telling is that there is no overall growth forecasted across the restaurant industry, meaning dine-in traffic in many markets, is actually shrinking.
The demand for delivery has been fueled, in part, by of the fastest growing technologies - third-party delivery. Delivery services like Door Dash, Uber Eats, Waitr and Grub Hub, to name a few, provide consumers with a bevy of restaurant delivery choices from the ease and convenience of their smartphone.
There's no denying that delivery is having a major impact on many segments of the restaurant industry. As a result, many restaurants, both independents and chains alike, have turned to both in-house and third-party delivery to boost sales or preserve market share.
Many independents feel compelled to begin offering delivery or risk getting left behind. But there are challenges. Profitability, capacity, quality control, logistics, delivery options are just a few of the issues that operators face when deciding whether or to offer delivery.
RestaurantOwner.com has just completed a survey on what independent operators are doing in regards to delivery. In this webinar, we'll share the insights from nearly 1,000 RestaurantOwner.com members who are experiencing both the challenges and benefits of delivery.
What You Will Learn:
- Delivery profitability
- 3rd-Party costs
- The most challenging delivery issues
- Most used third-party delivery providers
- Most prevalent delivery markets
- Key considerations when making delivery-related decisions
About the Presenters:
Jim Laube
Jim is the founder and CEO of RestaurantOwner.com. He has a diverse 30-year career in the restaurant industry that includes various staff positions, manager, controller, CPA and advisor to hundreds of independents throughout the U.S. and Canada. Jim is a popular restaurant industry speaker and seminar leader whose clients include the National Restaurant Association, Pizza Expo, SYSCO, Food Services of America, Gordon Foodservice, the New York Restaurant Association, Walt Disney and Papa John's.
Joe Erickson
Joe Erickson is the Chief Operations Officer and a partner in RestaurantOwner.com. He has owned and/or managed several restaurant/catering operations. He started his career by developing Luther's Catering, a division of the Luther's BBQ chain, in Houston. He was also a partner and co-founder of Sunset Dinner Cruises and was the founding partner of Bobby Mac's, a casual, full service restaurant in Kerrville. He later helped to develop a southwestern bistro, Nicole's Cafe San Felipe, and was managing partner for the original Truluck's Steak and Stone Crab, which now has 11 locations throughout the U.S. Joe is focused primarily on developing easy-to-implement, yet highly effective systems and processes to help our members improve their restaurants' efficiency, product utilization and most importantly, deliver a more consistent guest experience.
This video is for members only, below is a short preview clip. To login and watch the full video Click Here.
Download Handouts:
Download the 2019 Restaurant Delivery Survey
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Download the 3rd Party Delivery Worksheet
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Download the 3rd Party Delivery Checklist
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Download the Webinar Attendee Answers
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Attendee Answers:
| 1. What is your most pressing delivery issue? |
|---|
Show Responses
Hide Responses
| Commission/fees and owning the customer data |
| Cost of self-delivery vs. the commission |
| Dealing with tablets and reentering data |
| Fees are huge |
| Finding the single 3rd party vendor that will provide the best service, with the key towards cost controls. |
| Food Tampering |
| Getting the driver to not show up so early |
| Having the food keep it's integrity in travel! |
| Hiring drivers |
| How to select a delivery provider, single or multiple platforms |
| Maintaining food quality |
| Maintaining the integrity of our food quality |
| Price |
| Problems with 3rd party drivers - customer service |
| Quality of delivered product |
| Staffing with reliable people and reliable transportation |
| The experience of dine in customers - delivery services sit at the bar waiting for orders, and the bartender answering the phone at the bar instead of serving drinks |
| Transparency in costs - I'm not able to understand how much each 3rd party service costs |
| What to leave off the menu |
| 2. How many providers are you using? How is it working? |
|---|
Show Responses
Hide Responses
| 1 - DoorDash, I was able to get a reduced commission rate by signing an exclusivity agreement |
| 1 - For now, we may add more in the future |
| 1 - Grubhub only at the moment but we may add more in the future |
| 1 - UberEats |
| 1 - Waitr |
| 2 |
| 2 - I have plans to add more if I can get Chowly or Checkmate running |
| 2 - We did have one restaurant with four and we decided to drop down to two |
| 2 - We offer two per location, different providers are bigger in different regions for us in Tennessee |
| 3 - Postmates, Grubhub, and DoorDash |
| 3 |
| 4 |
| 4 - Doordash is our highest performer |
| 4 - It started to get tough managing all four, but now we are getting the systems in place |
| 4 - It's going well |
| 4 - It's not good because none integrate with our POS system |
| None |
| None |
| None - We are rural, it's hard to get DoorDash, UberEats, or Grubhub to service our area |
| 3. Do any providers integrate with your POS? |
|---|
Show Responses
Hide Responses
| No |
| No |
| No - Hoping for it |
| No - However I don't know how many providers are listing without permission |
| No - I wish |
| No - I'm looking into Chowly |
| No - Integration would be key, it would help reduce labor costs |
| No - Mine doesn't integrate without another 3rd party system, we use Checkmate to integrate with all 3 delivery companies we use |
| No - My Digital Dining POS does not even have on line ordering |
| No - We use Cake POS |
| Yes - I'm on Aloha POS, Doordash currently has an API and Grubhub is getting theirs completed |
| Yes - But the equipment does not work well |
| Yes - Only through my own website, my POS offers online order integration |
| Yes - Toast integrates with Grubhub and will support Door Dash soon |
| Yes - Two of them automatic, but I'm in the UK |
| 4. What is your lowest 3rd party delivery fee percentage? |
|---|
Show Responses
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| 15% - Waitr, but we paid $1,500 ($250/month over 6 months to lock the fee in) |
| 20% - DoorDash |
| 20% - Grubhub but its because I'm using my own driver, it was 30% using their drivers |
| 23% - Mr. Delivery plus 3% for credit card processing |
| 25% - DoorDash |
| 27% - 3rd party drivers, 10% with our own drivers |
| 30% - UberEats |
| 5. Do you have an exclusive provider arrangement for a lower fee? |
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Show Responses
Hide Responses
| 20% |
| 22% - Doordash |
| Currently negotiating this with Grubhub for 15% |
| I was offered 20% instead of 27% |
| I was offered a lower commission in return for exclusivity |
| Order mark gives lower rate because they do not provide a tablet and it all goes into the POS |
| They said they would lower it to 17% but it would lower my ranking giving me fewer orders and impressions on their site's results |
| Yes, with DoorDash |
| 6. Do you add a surcharge do delivery orders? |
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Show Responses
Hide Responses
| I understand the providers will nail you for that |
| Mr. Delivery and GrubHub both know that my prices are higher on their sites. |
| No - I'm wondering how popular a surcharge is |
| No - Prices kept at the same level |
| No - We are considering this, but we are very concerned that the customer brand will get damaged. We are leaning towards a delivery fee, not price changes to push the issue on the service providers. |
| Our vendor for "green" packaging suggested that we add a 12% fee for packaging. |
| Same prices currently, but plan to add a surcharge in the near future. |
| Yes |
| Yes |
| Yes - $0.50 - $1.00 higher and probably going up again this year |
| Yes - 5%-10% |
| Yes - We add 15% |
| Yes - When I can get away with it, some providers insist on having the same price as part of the contract |
| 7. What is your #1 challenge with 3rd party delivery? |
|---|
Show Responses
Hide Responses
| Commission rate |
| Cost |
| Delivery times |
| Error fees when there was on error on our part |
| Food is not delivered on time, temperatures are lost |
| I turned off special requests to limit order errors |
| Incorrect orders |
| Incorrect orders |
| Loss of control of the last mile and effect on brand |
| Lots of driver turnover, spotty availability |
| Order entry |
| Spotty |
| They are NOT partners |
| 8. On a scale of 1 - 10, how satisfied are you with 3rd party delivery? What is the primary reason why? |
|---|
Show Responses
Hide Responses
| 2 |
| 2 - Costs |
| 4 - Our margins are small as it is and the costs are too high |
| 6 |
| 6 - Extra sales |
| 6 - The atmosphere of the restaurant and experience of dine-in customers is degraded because of drivers standing around with their big bags |
| 7 - Additional sales are great (somewhat feel handcuffed that we have to offer delivery through providers) but not being able to control the entire experience or react quickly to customer issues is an issue |
| 7 - Extra sales, its where the customers are, not incremental |
| 7 - I believe we are reaching people that we otherwise might not, however, quality control completely lost |
| 8 - Cost and quality control |
| 8 - I'm attracting young customers in Mexico |
| 8 - Just start with Door dash |
| Commissions!! |
| GrubHub had a poor rollout and their system doesn't work as well as it should. |
| No control over the process, food gets cold |
| 9. If you don't do delivery, what's your plan? If you currently deliver, what's the #1 change you anticipate making? |
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Show Responses
Hide Responses
| Use delivery during slow periods and use our people during peak |
| I'm considering a 3rd party, but it doesn't seem worth it |
| We are considering changing to self delivery |
| Self delivery |
| More catering |
| We are in the process of completing the API development of our Aloha system, with their Mobile Engage App and the layering of Grubhub. This reduces our commission costs, and puts more control in our hands vs. other parties. |
| Automation for our self driver fleet |
| Increase pricing and order integration |
| Special menu to get profit from sales in delivery |
| Raise pricing for delivery |
| Convincing more people that order through the 3rd party app for pickup to use our own online ordering system |
