Dinner on demand
Delivery services proliferate as convenience boosts sales
There was a time when cellphones were the size of bricks, Google wasn’t a word, let alone a verb, and when getting food delivered to your house meant one thing: pizza.
Nowadays, a search on Google reveals more than a dozen services right here in central Ohio offering to let you order from dozens of restaurants. You can buy complete dinners, sandwiches, ice cream, and, yes, pizza, and someone will deliver it to wherever you want to eat.
“I was amazed at how many there were,” said Bonnie Riggs, a restaurant analyst for NPD Group. “That space has gotten really crammed.”
A Columbus original, Cafe Courier, opened the first such service here in the 1980s and was bought last year by ZipDish, a Chicago-based company with delivery services in eight cities. But the era of smartphones and on-demand entertainment has sparked the creation of services to satisfy the desire for ondemand food.
There is GrubHub, a digital ordering platform that added delivery service; Postmates; Skip the Dishes; Door Dash; and others.
The growing demand for delivery has also prompted big players Uber and Amazon — which have had a huge impact on other industries — to launch their own restaurant delivery services. ( They’re now serving central Ohio as UberEats and Amazon Restaurants).
In some ways, delivery is helping restaurants as much as delivery customers. Restaurant visits are not increasing, and the gap between the cost of eating out and at home is widening.
Restaurants need tools to attract business, and delivery services help.
Delivery is one of the few areas of restaurant sales that is growing, Riggs said. Delivery other than pizza has risen 20 percent in the past four years and is expected to grow another 20 percent by 2022, she said.
GrubHub and similar services offer a digital ordering system, via mobile phone apps or the internet, and the companies take a cut of the sale and may charge a delivery fee. At UberEats, the fee is $ 4.99.
The cost can be worth it because the services open markets for restaurants that traditionally couldn’t offer delivery. These services also help smaller chains or mom-and-pop restaurants tap into new customers who might not have ever chosen to visit.
“It allows operators to expand their dining areas without opening another restaurant,” said Tim Powell, senior analyst for Q1 Consulting. “Also, operators no longer have to invest in hiring drivers, paying insurance or dealing with vehicles.”
Jeni’s Splendid Ice Creams uses UberEats and Postmates for most of its stores across the country, plus a third service, FoxTrot, in Chicago. While they do not deliver triple- scoop cones of Salty Caramel, the services provide a nice bump in sales of packaged ice cream.
“On-demand delivery orders are a significant driver of pint sales for us,” said Ryan Morgan, Jeni’s spokesman.
Even behemoths like McDonald’s realize the potential of delivery, which it is testing in some markets.
“Delivery is the most significant disruption in the restaurant industry in our lifetime,” said Lucy Brady, McDonald’s vice president of corporate strategy, during the company’s recent investor day presentation.
Delivery isn’t new in the restaurant business, but being able to order via the internet, smartphone apps and other digital means is driving the boom, Riggs said.
Domino’s Pizza, once a laggard in the restaurant segment, has been increasing sales by double digits thanks to online ordering.
“Their growth has everything to do with digital,” Riggs said. “They have made it so easy to order.”
Other companies have noticed and are embracing that philosophy.
Columbus based Donatos has offered delivery for decades, and still does, but it also can be found among the restaurants on nearly every third- party delivery service as well. Donatos also has a mobile app.
“We are all about making it as convenient as it can be for people who want our pizza to get our pizza,” said Tom Santor, Donato’s spokesman.
Donatos uses the services here in Columbus, at its store in Nashville and at a few locations in Cincinnati. The orders are not a big part of their business, but that doesn’t matter.
“If ( customers) try us through that new channel, then that’s great,” Santor said. “If that is what it takes, that’s what we will do.”
It has become cheaper to prepare food at home and that has led to stagnant restaurant traffic. Delivery services give people more ways to feed themselves or their families. Even if it costs a bit more, for some consumers, convenience wins.
“It appeals to busy people who want to put a meal on the table,” said Chris Boring, a local retail analyst. “It is one more way to serve the customer.”
The proliferation of services is also likely to slow or consolidate in the coming years, Riggs said. She thinks the bigger folks, like Uber and Amazon will be the ones to survive.
“If Uber does anything like what they did with the taxi market, they will eventually dominate.”