A decision every hospitality company will face is whether to provide a delivery service to their customers. If you run a fine dining establishment, will it cheapen your brand? Can offering that option really bring in much more revenue? What are the logistics of immersing your business in this growing idea?
Expectations for the perfect dining experience are ever changing.
According to a report by the National Restaurant Association (NRA), people are dining out more than ever and going food shopping less.
Consumers want their experiences to be fast, varied and flexible, and they often want to “dine out” without leaving their comfortable couch and Netflix account behind.
In a study commissioned by Just Eat and written by economic analysts at the Centre for Economics and Business Research (CEBR), based on household spending, the total value of the takeaway market in 2014 was £9bn.
The market has grown 4.6 per cent annually since 2009, when it was worth £7.2bn. To put this in perspective, in 2014 the hairdressing and beauty industry sat at £4.7bn and employment agencies at £6.4bn.
Choose your market
It may be sensible to start marketing to millennials, meaning people reaching young adulthood in the 21st century.
The NRA report states that approximately 70 per cent of restaurant industry traffic is now off-premises, and 18- to 34-year-olds have a higher propensity to use off-premises meal solutions.
The Technomic Generational Consumer Trend Report states that fewer than half of millennials dine in at a restaurant and one fifth of millennials’ orders are for delivery (as opposed to collection orders).
Takeaway pizza giant Domino’s exemplified the trend by reporting a 21 per cent surge in its latest quarterly sales to £200m.
Seventy-five per cent of orders were placed online, and 61 per cent of which were made with mobile devices.
The figures from Domino’s were released after Just Eat, the UK’s largest online takeaway company, said sales rose 54 per cent in the first half of the year.
Takeaways have monopolised the delivery avenue, with online platforms like Just Eat and Deliveroo constantly growing.
Expenditure on pizza, curry and Chinese food is expected to grow by 28 per cent during this decade to £7.6bn a year, according to figures from Euromonitor International.
Many business owners associate delivery with takeaway food, but it is not a door that you should close based solely on this.
Dine in, take out or delivery?
Nando’s Preston manager Kate Turver revealed that Nando’s actually began as a takeaway when it reached the UK in 1992.
Today’s process involves ordering food over the phone or using the free app and picking it up from the restaurant.
Interestingly, the Technomic Generational Consumer Trend Report suggests that 41 per cent of people aged 38-56 opt for this method over dining in or a delivery service.
Although this business model has worked since day one, Kate says they will not rule out using Deliveroo in future: “Deliveroo is used in Southport Nando’s already.
“If we increase our takeaway sales to ten per cent… at the moment we’re doing eight per cent takeaway sales a week.
“In terms of saving money for the company, we don’t have to spend as much when giving takeaways as we do with a sit down, eat-in meal.
“The labour percentage is a lot lower and in terms of sales increases, it’s definitely helping to increase our sales. Obviously we’ve got our web app, and that helps to increase general business.”
When asked whether people spend more when dining in or ordering takeout, Kate said: “The average spend online is higher than in the restaurant because of the ease of add-ons, like pineapple or cheese in a wrap.
“It’s as though people don’t think they’re really spending money because they’re clicking on a screen.”
According to a 2016 BBC Good Food poll, people aged 16-24 spend an average of £28.26 a week eating in cafes and restaurants, while the typical spend among all adults is £17.22.
Teaming up with Just Eat is a relatively simple process – the restaurant owner just needs to register interest, input their establishment’s details and provide the relevant certificates, such as a food hygiene report from the council.
A Just Eat representative may visit your restaurant to verify that all of the information provided is correct.
The company charges 14 per cent in commission, plus a transaction fee if the customer pays by card.
According to Adam Loney, a Just Eat business advisor, the process can be completed in seven to ten days: “The platform works as a sort of middle man between the business owner and the consumer.
“It’s a bit like eBay in a way – an accessible, easy-to-navigate platform where customers can search and buy with ease.”
Just Eat states that partners save an average of nine working days a year, as the company handle all order details and customer queries.
More than 27,000 restaurants across the UK are teamed up with Just Eat, with their signup fee sitting at £699 with flexible payment options.
It is worth noting that the company does not provide the driver or vehicle – the restaurant itself must source these essentials and ensure the driver has the correct licence and credentials.
You may find it is appropriate for your restaurant to appoint an existing staff member as the delivery driver in the first few months of the delivery trial, as opposed to employing a new driver.
It all depends on how much control and supervision you want as part of the hiring and driving process. Find out more about getting involved with Just Eat here.
Just Eat’s biggest rival Deliveroo recently launched a subscription service for its most frequent and loyal customers.
‘Deliveroo Plus’ is working on a trial basis in Manchester, Birmingham, Edinburgh, Glasgow, Brighton and York. It waives its usual £2.50 delivery fee in favour of an £8.99 per month or £89 per year subscription.
Although the food is not included in the price, the first batch of existing customers enjoy two months free. Read up on Deliveroo here.
Things to consider
As a business owner, you will also need to consider whether your dishes will transport well.
The residual heat from a medium rare steak will have cooked it to well done by the time it had been delivered. Having a separate delivery menu may be appropriate.
It is worth deciding whether you are in an easy-to-reach location, or if customers would benefit from the choice of having their meals delivered.
In addition, depending on your location in the UK and proximity to the town or city centre, delivery costs would need to be negotiated and set.
Concerning your menu, if you cater to a specific lifestyle niche (such as vegetarian, vegan, gluten or dairy free, etc.), you can create regular customers that order from you multiple times a week.
You may be seen as the “go to” for their diet-specific dishes. In that case, it would make more sense to have your delivery in-house.
If you do not have the time or demand for delivery, you can at least save money by using a restaurant delivery system, such as the ones previously outlined.
It may seem like a lot of work for something that may only become prosperous over a long period, but it is advantageous to play to all of the feature’s strengths.
Advertise your new service everywhere you can – on social media, your website, on leaflets and perhaps even slotted inside your in-house menu.
When your restaurant begins a delivery service, you have added a new revenue source but also a new level of complexity to manage.
It is wise to consider what would be the most convenient for your customers.
If a delivery service seems impractical for any reason, you can evaluate other options – a takeaway collection service or a food truck – but it could be beneficial to utilise the space and facilities you already have.