Delivery boom is changing everything about the restaurant business
Delivery boom is changing everything about the restaurant
business
Charisse Jones, USA TODAY Published 2:01 a.m. ET April
24, 2018 | Updated 10:28 a.m. ET April 24, 2018
NEW YORK - Micha Magid would prefer that guests grab a
table to enjoy the sweet corn fritters, chicken wings and
"brontosaurus" ribs served at Mighty Quinn's Barbecue, his restaurant
chain.
But so many diners want their food delivered to their
front doors instead, the eateries have to carve out valuable space solely
dedicated to fulfilling those orders.
"If we have our preference, everyone would come to
the restaurant,'' says Magid, one of Mighty Quinn's co-founders. "You get
a much better experience when food doesn't have to travel for 15 minutes. It's
hotter and better . . . But if someone wants to stay home and get great
barbecue, we want to deliver that.’’
The growth in the restaurant industry is coming from
those who are dining at home.
Customers are increasingly ordering food through apps on
their smartphones or by calling in. And
that demand for deliveries, from sit-down restaurants as well as the more
familiar pizza chains and Chinese take-out spots, is dramatically changing the
restaurant industry.
Besides having to redesign restaurants to take delivery
into account, the phenomenon is enticing restaurants to modify menus and pick
ingredients that hold up well during travel.
In the last five years, revenue from deliveries jumped
20% and the overall number of deliveries increased 10%, according to The NPD
Group.
Restaurants, from quick-service chains like Panera Bread
to sit-down eateries such as Applebee's are ramping up or diving into delivery
for the first time to meet the demand of diners who increasingly want
everything -- from groceries to gadgets --dropped at their door.
“Convenience is among the chief reasons why consumers
visit restaurants and delivery brings a heightened level of it,” Warren
Solochek, NPD's senior vice president, said in a statement. “Restaurants need delivery in today’s
environment in order to gain and maintain share. It has become a consumer
expectation.”
Restaurants have seen the shift. Wesley Wobles creates
high end, sit-down fare at his Southern-French hybrid eatery dubbed Pinky's
Space in New York, then sends most of it right out the door. Delivery has grown
to the point that its' as much as 75% of his business.
“When we signed up with GrubHub that changed everything
for the business,’’ he says of the online and mobile food ordering site. “Our
first day online, our business tripled.’’
These days, Wobles says he recognizes that "we won’t make a lot of money from walk
ins,’’ Wobles says. “Our business is going to be delivery and catering.’’
Chef and restaurateur Zach Pollack says that he designed
his Italian-American eatery Cosa Buona in the Echo Park section of Los Angeles
with delivery in mind.
That means its menu is completely different from
Pollack’s other Los Angeles restaurant, Alimento, where the cooking of the
pasta is timed to the minute to ensure it’s the perfect texture when it arrives
at a diner’s table from the kitchen.
“Obviously when it’s in a box for 60 minutes, and not 60
seconds, that changes’'’ the food, he says.
So, at Cosa, there are no pastas. The specialty is pizza,
along with some other menu choices like meatballs finished with burrata and
eggplant parmesan that's "as good reheated as it is cold from the
fridge.’’
Roughly two-thirds of the food Cosa Buona serves is eaten
on site. But the lion's share of the food going out the door is delivered
rather than customer's taking it out.
Tapping into the strong demand for delivery is
particularly critical in a city like Los Angeles, Pollack says, where rising
minimum wages and other regulations make it harder for restaurants to make a
profit. "A lot of places are trying to figure out how can we increase
revenue without physically expanding our business,'' he says.
Diners are increasingly asking for their food to be
dropped off not only for dinner, but for breakfast and lunch as well. Delivery
of breakfast or morning snacks soared 13% between 2012 and 2017, while lunch
deliveries ticked up 3%, NPD says.
BJ's Restaurants, which operates 198 casual-dining
restaurants in 28 states, says the percentage of its business that is comprised
of takeout orders and deliveries "has almost doubled in the last year,''
says chief marketing officer Kevin Mayer.
"It's definitely a strong emerging market,'' Mayer
says of delivery. The dining chain has been offering complimentary delivery
promotions, like free pizzas earlier this month to celebrate National Deep Dish
Pizza Day, to spread the word about the option.
But it's not just national chains that are boosting
delivery.
Mighty Quinn's Barbecue has 10 eateries in New York City
and suburbs. With their delivery orders continuing to grow as a percentage of
their business, the chain sometimes has three or four drivers working during a
given shift at its New Jersey restaurants while it uses third party courier
services at its other locations.
"I think as people look at having their family meals
at home, it's less about spending an hour in the kitchen cooking, and more
about delivery or take out,'' says co-owner Magid, "We saw an opportunity
to participate in that growing segment of the market.''
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