A decade ago local grocery stores in urban areas were offering a unique service to shoppers who didn’t have their own cars. If you bought more than a certain dollar amount, they would have your groceries delivered to your home in a few hours. Delivery areas were limited and you had to pay for your groceries in the store as well as any delivery fee, but for those people whose lack of a vehicle prevented them from doing the weekly shopping, it was a godsend.
Fast forward to 2020 and a worldwide pandemic has forced all food service businesses to adopt a delivery service option. Some are outsourcing the orders with companies like Door Dash, and others are trading their waiters and waitresses for delivery people. This is especially true for restaurants, which have been one of the hardest-hit sectors during this crisis.
In order to survive, grocery stores and restaurants in Montreal have been forced to adopt a pick-up or delivery option – for better or for worse.
Fees and commissions: The price to pay
While delivery services like Uber Eats or Door Dash have helped to keep many restaurants alive, it hasn’t been without a significant strain on the restaurant owners.
The fees associated with these apps have been eroding the already slim profit margins. Demanding commissions of nearly 30% in some cases, the price of keeping the doors open can become too much to handle for businesses that are already experiencing a sudden drop in patronage. For some, this has forced them to avoid fees altogether and hire delivery drivers.
This has also encouraged competition and ingenuity for startups. New apps, offering lower fees for restaurants have emerged to serve the need of the community. Charging a fraction of the commission fees, or waiving them all together for a period of time, these apps are giving restaurant owners options to keep serving customers without increasing the risk of shuttering forever.
Delivery apps are beginning to recognize the real issue. In order to stay in business the restaurants they service must also stay open. They must also find a way to make delivery preferable to pick up, another option that is growing in popularity. While some companies like Instacart have a service that allows the customers to pick up their orders curbside, removing the need for a delivery person, not all of them offer such a service.
Here to stay?
In short, food delivery services must find a way to make the most of the current situation. While the fear of being infected may cause many customers to put up with slower service or delivery fees for a while, they may soon decide that curbside service isn’t a bad compromise if performance doesn’t improve.
While the current pandemic has helped to normalize food delivery services for many people, it doesn’t guarantee that these customers will remain regular users. What we do know is that long after the pandemic dies down, restaurants will still use food delivery services to help get their food to their customers. What the landscape will look like depends largely on how we proceed now.
Image credits: Olymel Food Service