Gone are the days when the delivery guy at your doorstep was there to bring you just pizza or General Tso’s chicken.
Now, that might be what’s in the bag or box—no shame in a pepperoni pie—but it might be something fancier, say linguine vongole or beef carpaccio.
The pandemic brought about a seismic shift in how restaurants and their patrons interacted, with stay-at-home orders forcing restaurant operators to expand their delivery services and tap into mobile ordering apps like DoorDash and Uber Eats.
According to results of a TD Bank survey released Jan. 5, those avenues are here to stay, with more than 2 out of 3 restaurants relying on delivery for 11% or more of sales and about 2 in 3 restaurants relying on mobile ordering for 11% or more of sales.
About one-third of restaurants rely on delivery for more than 20% of sales; and one-quarter rely on mobile ordering for more than 20% of sales.
To keep up with changing consumer preferences, operators noted that their top areas of investment in 2022 include mobile ordering (54%); delivery services (47%); technology such as a new point-of-sales, digital signage, or other in-store tech (45%); and alternative payment methods (37%), TD found.
“Consumers have become accustomed to the speed and convenience of mobile ordering and delivery, which in turn, has changed the restaurant franchise landscape,” said Mark Wasilefsky, head of TD Bank’s restaurant franchise finance group. “Even once there is no longer the active threat of the pandemic, consumers will still turn to these mediums. Mobile ordering and delivery have become a part of everyday life and are no longer nice to have, but expected, and operators need to continue to enhance these offerings to keep up with competitors.”
Sadije Husenaj, who owns Cara Mia in Millburn with her brother, said that early in the pandemic, mobile ordering made up 80% of the restaurant’s business. The other 20% came from phone calls.
While the apps have their place and bring certain customers into Cara Mia’s orbit, Husenaj said she tries to encourage customers to order directly from the restaurant to avoid third party delivery services fees cutting into her bottom line. Since Gov. Phil Murphy signed a law in June 2020 capping the third-party service fees to 20% of the total bill, or 10% on orders delivered by the restaurant’s own delivery person, fees aren’t as high as they had been, but she still takes a hit on those fees. She said that she may consider switching to a POS system that allows her to set up her own mobile delivery system.
“Just now with this new omicron variant, we’ve noticed a lot of people cancelling their reservations, so we’re seeing a huge spike again in Uber Eats, DoorDash, and takeout. Since November, we’ve even had to designate a space just for takeout orders,” Husenaj explained.
More than half of survey respondents told TD Bank that they’re making the same move as Husenaj, but permanently: 55% of operators plan to add more space for pick-up. Additionally, 45% plan to provide additional drive-thru locations, and 43% plan to add on-site outdoor dining space.
“What we are seeing is that the pandemic has permanently altered consumer expectations and behaviors to the point that operators are comfortable enough to make long-term capital investments,” Wasilefsky said.
Though through the summer, mobile ordering and the pickup or delivery business wasn’t as busy as it is now—sometimes, the apps didn’t even ring with an order—Husenaj believes the takeout business is here to stay.
“I do it too and I don’t even do it because of the pandemic. Some nights are so busy, you just want to have dinner ready. I don’t see it going away, even without a pandemic,” she said.
Despite the challenges of the last 22 months, restaurant operators are largely optimistic about the future. While 81% of respondents report that they feel optimistic, more than 50% say they feel very optimistic, and 47% believe their revenue will increase significantly in the future.
“If we got through last year, I think we can get through everything. That’s the God’s honest truth,” Husenaj said. “What happened to us, that was the hardest. And we got flooded Sept. 1, and we said, ‘God what else can you give us this year?’ We rolled with the punches. Hopefully that’s in the rearview. We’re very optimistic for 2022.”[/vc_column_text][/vc_column][/vc_row]
1 of 1 article
0 articles remaining
Advance your business edge with news from NJBiz. Register now for more article access.