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Food Delivery: The UK Market

Food delivery is booming in the UK, with the market growing by 18% last year . The average British household now spends over £300 per year on delivered food , and the big players in the sector are becoming extremely prominent and valuable international brands in their own right.

Restaurants who cannot currently offer an eat-in service may be in a position to shift their model to delivery, since the infrastructure, as we will examine below, is readily available.  We’ve also heard of small family hoteliers and Bed and Breakfasts also shifting to a takeaway service as they have capacity in their kitchens to do so. It may also present an opportunity to continue to serve your regular customer base, support your community and increase the likelihood of returning custom once the crisis is passed.  

There are several delivery companies in the market, however we have summarised below some information about three of the best known, Just East, Deliveroo and Uber Eats including their key features.

Basics

Just Eat is by far the largest operator in terms of both restaurants and customers, although the growth of the market suggests there remains plenty of opportunity.

 

Average daily users (2018)

Restaurants covered

Customer profile

Deliveroo

45,000[i]

15,000[ii]

Younger urban

Just Eat

500,000[iii]

30,000[iv]

Younger urban

Uber Eats

50,000[v]

17,000[vi]

Older and suburban

 


However Uber Eats may offer advantages to restaurants outside the large conurbations. It’s also worth bearing in mind that not all the platforms cover all areas, so your options will be limited to those operating in yours.​


 

What do They Cost to Use?

There’s a cost to use these services, especially in a market operating on relatively low margins. However, they do take care of the digital marketing of your business to large audience in your local community.

 

Cost to restaurant

Additional costs

Cost to customer

Deliveroo

Roughly 30% overall

Admin

£2.50 per order

Just Eat

14% + VAT + admin

£699 up-front

Up to £4

Uber Eats

Max of 30%

Admin

£3.50 per order

Clearly these are significant additional costs so the profitability of each dish must be taken into account when compiling a delivery menu.  

It’s always advisable to start small and grow your menu from there.  This ensures you can get the ingredients needed and that you are not stretched too thin.  Stick to familiar dishes your community likes, and definitely get their feedback about what else they might like to eat. 

 

Other Considerations

Marketing

The larger platforms such as those mentioned above can offer marketing support which can help to raise awareness of your arrival on the app. The trade-off is that it saves you time to doing the marketing into your local community, allowing you to focus on what you do best.

Systems Integration

It is likely to lead to a far smoother and slicker experience if you select an app that links customer orders to EPOS tills, to prevent confusion among front of house staff.

Upholding Your Brand Ethos

It’s important to select a delivery platform which reflects the values of your business. This can be done by looking at rates of customer satisfaction, timeliness, reliability and how it handles complaints.

Contract Length

If you are entering the market it may be difficult to know reliably who the best suited partner might be. So give some consideration to the tie-in period you are asked to sign up to.

Do Your Dishes Travel?

Remember, presentation is crucial, so it’s important to work out if your dishes will lose their visual appeal after a ride on the back of a moped through a crowded city.

Conclusion

Offering delivery may not have been part of your business plan, but tens of thousands of restaurants have made it a successful part of their operations. It will mean carrying out a detailed analysis of your costs, and, due to the challenges of encouraging ‘impulse purchases’ such as additional drinks or deserts, it is likely to reduce the average order value compared with dining in. However in the short and medium term it may offer an opportunity to remain viable over the coming months, and even reach new audiences with your cuisine.