Food Delivery Services

The COVID crisis has made one thing clear to everyone: food takeaway and delivery are here to stay.

Pre-COVID, the experience of going out once a week to a restaurant was a date night treat for some, while others ate out daily.

During isolation time, however, dining changed. With the choice of eating out taken from us, our options shrank to getting takeaway or home delivery to enjoy in the comfort of our own home.

We realised that takeaway meals are not just a preference but for some a necessity. The question emerged – not ‘if’ but ‘how’ food delivery could be managed efficiently both logistically and financially.

Food delivery platforms are an excellent marketing tool for businesses. They have a huge reach and are “a good platform to get your word out there” as well as a logistics solution for payment and delivery.

But it’s at a cost. After restaurants pay their charge of up to 35% (excluding the delivery fee paid by customers) plus another 10% of that 35% for Merchant GST collection as well as the ATO’s GST of 10%, restaurants need to meet food, premises, utilities and staff costs from just over 50% of their gross sales. It’s little wonder that hospitality profit margins are often quoted as less than 5%.

“Before covid-19 it wasn’t so bad, as [the delivery platform] only represented 15-20% of takings. But now with our trade down 80% it’s hurting like crazy,” one restaurateur commented on social media.

The financial squeeze that food businesses have felt during the pandemic meant that some of them began taking more responsibility for contactless pre-ordered pickup as well as local delivery of their food.

Some restaurants raised the cost of their commercially delivered menu to offset costs. Others have chosen to give a discount of 10 – 30% for pre-ordered food pickups.

By sharing their financial strains and urging consumers to order direct for pickup or minimum order restaurant-managed delivery, owners hope that a more aware public will change their ordering habits while supporting restaurants in their local area.

“For those of you that prefer the convenience of online ordering, today is the day that you can now order your favourite [food] direct through us. You will be helping our small local business … by ordering direct through us, we can guarantee that your meal is intact and delivered hot to your door,” another says.

COVID has changed the dining out landscape, and some of its effects will be lasting. Consumers are now more aware than ever that the businesses they support will be the ones who stay in business.

NOTE: Since writing this post, Uber Eats has reduced their delivery charge to 30% of the order for some businesses during COVID.