“Eating in is the new dining out,” staff writer Derek Thompson declared in an August article published by The Atlantic.
The statistics seem to support this. In 2020, more than half of restaurant spending is projected to be “off premise,” rather than inside a restaurant, the magazine reported.
“In other words, spending on deliveries, drive-throughs, and takeaway meals will soon overtake dining inside restaurants for the first time on record,” according to the article.
The San Francisco-based app DoorDash dominated the nation’s food delivery services market in October, capturing 35 percent of sales, according to data from consumer analytics firm Second Measure.
Publicly traded rivals Grubhub and Uber Eats captured 30 percent and 20 percent of the market, respectively, according to Second Measure.
Analysts say meal delivery has even more room to grow, CNBC reported in November. Morgan Stanley published research showing meal delivery services only address 6 percent of the $350 billion dollar quick-service restaurant market, according to CNBC.
PARTNER VS. NON-PARTNER
“We made that move just because we wanted to mostly make a marketing outreach, not so much to profit from it. We came into the mindset that we weren’t really going to profit from Grubhub,” said Charlie Wofford, business development manager for both establishments.
“It does allow us to get our name out there. … It’s marketing that almost pays for itself.”
For others, like Louie Sciarrotta of Louie’s Pizza, it isn’t worth the risk.
“I can see the benefits and I can also see the pitfalls,” Sciarrotta said. “Right now, on my balance sheet, the pitfalls outweigh the benefits. … The biggest issue is, I’ve got no control over those drivers.”
While Louie’s Pizza does not officially belong to any third-party delivery service, that does not mean the restaurant’s menu isn’t available through those platforms. DoorDash has faced legal trouble in the past for using restaurants’ menus and logos without permission, and in response to declining sales, Grubhub has also begun delivering meals from restaurants that have not agreed to work with them, Restaurant Dive reported Oct. 31.
“Rather than approaching your restaurant and asking to partner with you, this tactic involves Grubhub uploading your menu and information to their site,” Restaurant Dive reported. “When a customer wants to place a Grubhub order from your restaurant, Grubhub will have a driver either call it in or place the order in person.”
The driver then pays the merchant with a Grubhub-provided debit card before delivering the meal to the consumer. This means Grubhub bears the brunt of the cost because it does not charge the restaurant, although it collects delivery fees, according to Restaurant Dive.
“We are not a provider. … However, we are listed on all of their menus, so their customers can purchase our product through them, but they’re paying our menu price plus a delivery charge,” Sciarrotta said. “We get a lot of orders through them — maybe by popular demand.”
Louie’s Pizza has offered its own delivery service for the last 35 years, and Sciarrotta hasn’t noticed a hit from the extra competition, he said.
Still, he said, he feels more comfortable when his product is in the hands of his own employees.
“I have had [some] drivers come into my pizzeria to pick up product. … They’re not professional, they’re dirty. … I don’t really want to give my product to some of these people because I don’t know what they do with it after they leave my pizzeria,” Sciarrotta said. “Somebody orders directly from us — those are my drivers. I pay those people, I control where they’re going and how they present themselves.”
LOSS OF CONTROL
Sciarrotta’s concern is echoed across the Pikes Peak region’s service industry, even by establishments that have opted to partner with food delivery service platforms.
“You can have the best product in the world, but when you prepare it and cook it and send it off with an intermediary, it’s a whole different world once it leaves your building,” said Martin Troy, general manager of Jack Quinn’s Irish Pub and Restaurant on South Tejon Street.
While “80 to 90 percent of [delivery] drivers are bang on,” even one negative customer experience could prove detrimental to a restaurant’s bottom line, Troy said.
“Our biggest seller is our fish and chips. … That’s one thing we have to be on point on every time,” Troy said.
Grubhub originally only delivered to addresses within a 3-mile radius, Troy said, but that policy has changed.
“Now we’ve got people calling from almost Banning-Lewis Ranch getting fish and chips, and when they get them, they are inevitably soggy,” he said. “You cannot keep any kind of batter cooked crispy and hot for that length of time.”
“You’ve made the sale and got the money, but you’re going to pay the price if the food gets to the customer in [poor] condition,” Troy added. “There is no way you can ensure that.”
While Wofford likes that Grubhub makes it easy for eateries to control their own menus by directly uploading pictures to the app, he said that unreliable drivers have caused headaches.
“We do consider Grubhub a customer to us, so we want to get [the order] fired right away,” Wofford said. “If it’s bad weather, that’s understandable — we’re just not going to fire that right away. We’ll hold it for 20 minutes or so.
“But on a nice weather night, [the food] is ready in 10 minutes and then an hour later, the driver shows up,” Wofford said. “At this point, we feel like it’s unfair to us because when the customer gets the food, they’re going to blame us — not Grubhub.”
When the driver isn’t on time, restaurant staff then face a decision, Wofford said: Do they throw away the food and remake it — thereby losing money — or do they send the meal as it is and risk the customer’s dissatisfaction?
“That’s frustrating,” Wofford said. “We have really good ratings through Yelp, Google, Facebook and Trip Advisor. Our reviews on Grubhub are not bad, but they are not as high.”
Odyssey’s primary objective in joining Grubhub was to drive more traffic into their brick-and-mortar restaurant. Wofford isn’t sure how successful that has been.
“I feel like somebody who is going to order Grubhub is probably not necessarily someone who is going to be a regular at a restaurant,” he said. “We’d be lucky to get somebody that eats our food and says, ‘This is so good, I want to go into the restaurant.’”
Atmosphere is crucial to the business model of establishments like Odyssey and Jack Quinn’s, and consumers who only experience them through take-out are not likely to become repeat customers, Wofford said.
“I feel like if you want the best of our product, the only way to get it is [by coming] right into the restaurant. … When you walk in the door, especially if it’s nighttime, it’s full of energy, great times, great conversation. … That is what we sell, is the environment,” Wofford said. “It’s really hard to sell that vibe and energy just through to-go food.”
“I don’t know if it’s a Millennial thing right now, but people, more and more, don’t want to interact with people,” he said. “I think it’s unfortunate that people don’t want to go out as much as they used to.”
Another advantage of in-house diners is alcohol sales, which have taken a noticeable dip at Jack Quinn’s since the advent of food delivery services, Troy said.
“Back when I started here [in 2003], the percentage was around 45 percent, up to about 55 to 65 percent, in favor of alcohol [sales],” Troy said. “Now it’s almost 50-50 in some cases — sometimes it’s 60 percent food to 40 percent drink.”
“We would like people, obviously, to be in the pub having a pint of Guinness or a cocktail with their dinner,” Troy added.
Odyssey staffers have kicked around the idea of no longer using Grubhub, but the idea never gains much traction, Wofford said. As for consumers, the platform’s convenience is difficult to replicate.
“Change is not always easy. … It seems like we’ve got that system down, and everybody knows what to expect even though sometimes it’s kind of a pain,” Wofford said. “No one has really said, ‘This is important enough to not use them.’”