Restaurants Struggle With Food Delivery – NBC 5 Dallas-Fort Worth
Do you fancy pancakes? Would you like to have a hot soup delivered straight to your home from your favorite restaurant?
What was once saving the hospitality industry during the pandemic is now becoming a concern for profits as labor shortages continue to rage.
As people rush to eat in person again, industry experts observe more restaurants taking delivery off their menus.
Even bigger chains like Applebees, Olive Garden, and IHOP dictate who to prioritize.
“What happened is that delivery demand has remained flat and constant as the dining rooms are open. So what restaurants are realizing today is they can’t always do everything, ”said Lisa Miller, a Dallas-based specialist in consumer strategy and insights.
“They have to throttle delivery to make sure they can take care of the customers who are right in front of them.”
Miller runs her own management consultancy, LWM Associates, and has worked with dozen of brands including Walmart, Applebee’s, IHOP, Kimberly Clark, Frito Lay, La Quinta and 7-Eleven.
She said larger restaurants are taking positions to focus on dine-in customers because that is where the profits come from.
In addition, there are not enough staff to meet demand. Add to this the rising costs for ingredients, wages and rent.
“Dine-in-demand is really unleashed. People are excited to be going to restaurants again, ”Miller said. “Coupled with the labor shortage and you can imagine that restaurants are now receiving orders from dine-ins, they are receiving web orders, app orders, call-in orders. You just have to start setting priorities. “
Not to mention the fees from third-party grocery delivery services like DoorDash, UberEats, and GrubHub, which can be especially difficult for smaller businesses to proceed with delivery when the demand for food is greater.
“When you think of the smaller mums and pops, when 35% go to the delivery service, it’s definitely not very profitable for these local businesses. It probably hurts even more, “Miller said.” Businesses large and small rely on third-party vendors, but it costs a big chunk of margin and profitability. When the choice is yours and you can’t do it all, focus on the customers who invite them to dinner. “
Miller also tracks consumer sentiment. She said a recent consumer survey found that 15% of guests reported that delivery was unavailable at peak times in recent months.
“Slow delivery times, delivery charges – consumers are actually starting to say that maybe it’s just not worth shipping because there are so many variables,” she said.
Interestingly, Miller said she’s seen solid demand from diners who are still uncomfortable with in-person dining and choose to have delivery instead during the surge in the Delta variety.
The data also showed mounting frustrations with the personal dining experience due to the labor shortage.
LWM & employees
These dates have shifted again towards dinner in the Christmas season. So it remains to be seen how the omicron variant will affect consumer behavior.
But what can consumers expect?
It is important that you check with your favorite restaurants to see how much, if any, they cut down on delivery. DoorDash added a feature this year that allows restaurants to automatically turn off delivery in the dining room during peak hours.
You may find fewer options, more fees, and longer waiting times when ordering delivery, especially during peak hours.
“I think what I would tell consumers is that they may need to start using the curb and actually driving and fetching,” Miller said. “I think this is something that consumers need to adjust so that delivery is not available when they want it.”
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Restaurants Struggle With Food Delivery Due to Dine-In Demand, Labor Shortage