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Impact of Food Delivery Services on Small Scale Restaurants and Food Businesses

In modern times, every restaurant owner prefers to have an online food delivery service due to the rising trends. About 60% of US citizens order delivery at least once a week.

Especially in the post-COVID-19 world, there has been a 169% increase in restaurants using online ordering and food delivery services.

However, are you aware of how the actual working of food delivery services and apps can bring down your profit margin and food business? 

It’s undeniable how these services have helped restaurant owners to bring about revolutionary changes in their services. Yet, there are some solid negative facts nobody talks about. 

This article will talk about the sordid, non-profitable side of these food delivery services. 

Extra Commissions

Let’s begin with the most obvious fact of these food-delivery apps. According to Techcrunch statistics, UberEats and other delivery services take about 30% of your total profit. It is not just applicable to expensive dishes but even inexpensive ones.

The commission or delivery rates also keep fluctuating. 

  • According to the Economic Times of India, Swiggy, India’s food delivery service increased its rates from 12-18% to 18-23%. Thus, you cannot rely on these services. 
  • Nearly 82% of the restaurant owners believe that the commissions are way too high and unfair and 33% of them believe that it’s not worth paying so much, as per HospitalityTech.

Now, this can bring down your profit margins, especially in times of economic slowdown.  

No Customer Relations

On one hand, you’re losing out your money to commissions and on the other, you are also losing out on customer relations. Upserve says about 43% of restaurant owners in the UK believe that using food delivery apps interfere with the customer’s relations with the restaurant.

You might wonder that if customers prefer these services, why not go for them? However, the lesser-known fact is that about 78% of consumers prefer ordering food directly from the restaurant’s app or website rather than a food delivery app.

Your customers want the money to reach your restaurant itself rather than third-party food delivery services.

Big Blunders by Food Delivery Services

How can we forget the big  Zomato blunder of India that stormed the social media with a delivery guy eating out of a customer’s parcel? Such incidents can create a bad image of food delivery services. This can, in turn, can harm your investment as customers are more likely to choose another platform for placing orders. 

Zomato has about 100,000 listings all over India. Now, this may sound grappling but in reality, the restaurants have to face a lot of competition, especially the ones located in big cities.

Did you know that Swiggy’s commission rates also differ according to the region? This can cause a major loss to restaurants situated in metropolitan cities. This is an alarming situation for all restaurant owners!

What is a better alternative then?

Now there are many Zomata/Swiggy alternatives or Ubereats alternatives to building your in-house ordering facility. Let’s not deny the initial set-up cost of your application or website. Appinventiv says this can cost about 60,000$ or more which a lot of restaurant owners cannot afford.

Restaurant business post-pandemic saw a major increase in online food deliveries by 300 times. This is because of the following reasons:

  • To ensure social distancing
  • Contactless deliveries and orders
  • Digital payment
  • Strict lockdown rules in certain regions
  • Hygiene and safety 

Thus, in the present time, it is absolutely necessary to have your own food delivery service.

Now, what if you can get your customized branded mobile website for online food ordering? This can decrease all the extra costs that are eating away your restaurant’s profits. We can help you in setting up your ordering facility without any extra costs at Grubly.

Grubly can help you build and customize your website, make online ordering and payments easy, and it takes absolutely no commission, and many other benefits which you can see here.

All you needed was this information to have a kick-start for your in-house ordering services!

After all, in this capitalist world, you do not have to give in to the marketing gimmicks if you have all the right information.

Author avatar
Dhara Maniar

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