Last week, meeting with several restaurant CEOs, the discussion took a turn from the all-important “labor costs” to that of the “Delivery Dilemma.”
Once reluctant to initiate a 3rd party delivery program, one restaurant owner “joined the herd,” resulting in delivery sales between $1,000-$1,200 a week.
Now that sounds attractive, but inquiring about the profit from those delivery sales, the response was, “Very slim.”
There’s a real pressure to do delivery and it seems that some 3rd party delivery services can hold you hostage. They can “force” you into their program by publishing your menu on their website – without your permission – and then suddenly, and unbeknownst to you, some delivery orders appear in your kitchen. And you wonder where the hell did they come from!
The 3rd party will come to you and say, “See, that’s how we can increase your sales.” DoorDash is infamous for doing this without a restaurant’s permission. Those sales seem attractive, so you sign-up. On the other side of the spectrum, they can subtly discourage, on their website, their customers from ordering from your restaurant.
Suddenly, the national delivery services are spending millions of dollars in advertising – GrubHub, DoorDash and Skip the Dishes. Add this to the several local services in your hometown, I would think there’s soon to be a dramatic shake-out, where only the financially-strong will survive.
Conclusion: The customer mindset of delivery is not going away. Your decision is to “join the herd” ,,, or abstain. To make a profit … or not. To put your restaurant’s reputation and food quality into someone else’s hands … or not.
I’ll go out on a limb and say that soon you can expect to hear disastrous delivery stories becoming public, like drivers opening the bags and taking some food out or making a pit stop enroute to the customer’s home. Your imagination can roam to what could be other unfortunate instances.
Delivery is a great innovation and service, yet it still has its kinks to work out, from operations to finances to people.
However, I believe that restaurants need to take more control of the situation because without you, the delivery services won’t be in business. If you think you’re being held hostage, then it’s time to turn the tables around, now!