Restaurants losing money on delivery orders

[TexasTowelie]

EL JEFE’S TAQUERIA, a casual Mexican restaurant in Cambridge’s Harvard Square, used to generate about a quarter of its sales through home delivery. Because of the commissions paid to delivery services – apps like GrubHub and DoorDash – the restaurant barely broke even on those sales.

When Gov. Charlie Baker ordered all restaurants in the state to close their seating due to the coronavirus outbreak, allowing only takeout and delivery, El Jefe started relying on delivery for three-quarters of its sales. Owner John Schall said the delivery services, which had been taking 7 to 8 percent of his revenue each month, are now getting 18 to 19 percent. That’s an amount Schall said his restaurant simply cannot afford.

“I will lose money in April, but the delivery companies made $25,000 off of me,” Schall said. “If this problem isn’t dealt with, there will be a whole second wave of restaurant closures.”

When Baker announced the restaurant closures, which went into effect March 17, allowing takeout and delivery was seen as a way to help patrons continue to get food and help restaurants stay afloat. But since then, many restaurants are discovering that the economics just aren’t working, due to the commissions – generally 25 to 30 percent – that delivery services charge.

Read more: https://commonwealthmagazine.org/economy/restaurants-losing-money-on-delivery-orders/

[bamagal62]

1. I order directly from the restaurant if they offer delivery.

But many don’t. Maybe they need to hire some delivery guys.

[mr_lebowski]

2. Same here (nt)

[LisaM]

3. This is just making an already-existing problem worse.

The New Yorker did a piece on this a number of months ago.

[duforsure]

4. To insure their business will survive

They will have to make their own deliveries , and promote their services and food better . Many here around me aren't updating their online sites with new menus (reduced) or newer hours, or some even if they aren't open yet. Promotions like buy a essential worker a meal, or reduced costing meals for the owner to reduce costs. The smaller restaurants are going to be destroyed even worse the longer they wait getting checks directly to the people, that will help them out. I have chosen several to help by ordering regularly from , and trying to add several more. Delivery services will have to reduce rates or face losing business, and some restaurants, will to succeed ,have to increase pricing, and cut costs to survive. This could become the new normal. If trump and the GOP keep dragging their feet getting money to the people the trump depression will cause most smaller restaurants to never be able to open again, or survive.

[dem4decades]

5. I only order from a place with their own delivery or curb side pickup.

And tip well, i understand they're hurting. If the owner sees he's leaving 25 grand on the table he should figure out a way to put it in his own pocket.