RESTAURANT OWNERS’ CONS AND COSTS OF NATIONAL FOOD DELIVERY APPS

Did the CEO of Domino’s Pizza Buy $100,000 of his competitors Gift Certificates to make a point? Did he give them to many Consumers for FREE, as his way to push “SHOP LOCAL”? We think so.

He then paid for Commercials,to be placed on National Sites explaining that Silicon Valley designed Food Delivery apps, make huge PROFITS out of you, the Food and Restaurant Entrepreneur’s.

He tried to explain that this was no more than a B.S. Rescue Ploy designed as a savior to the COVID lock down and the likes of Door Dash, Grub Hub, and Uber Eats were simply designed to feed the in-home demand that had been falsely created. He stressed:

“Skip National Delivery Apps and Order Direct from Local Restaurants.”

Moreover, even though public dining rooms were closed for much of 2020, delivery services became the savior for many Eateries, but unfortunately, that’s the only side of the story they want you to buy into.

Yes, they come with their own set of cons and costs, and we’re not just talking financial costs. There are the hidden costs that third-party delivery services pose and the ways these services impact everything from restaurants’ income to the environment.

Sure, partnering with Uber Eats may well increase your visibility and find new customers, but at what price? Their fees average 30% of the total order, eating away at the tight profit margins you currently work with, and the reality is you have just signed onto a new partner. A partner who did not buy in, but a partner who now has control, and a partner who is guaranteed his cut, with no guarantee for your cut. We think not.

Sure, the business owners in the Big Cities are now re-thinking the strategy, as they see that the results are not as they were led to believe.

In a past interview on CNN, we saw Mathieu Palombino, owner of New York City-based Motorino Pizza, state:

“The worst thing that has ever happened to us is them.”

Palombino said of delivery service Seamless, which is owned by Grub Hub.

“Before food delivery apps became all the rage, Motorino Pizza had its own delivery system — one that worked just fine for the restaurant and its customers.

“Unfortunately, we got sucked in and now these apps are like Uber. More expensive, pushing their rates on a frequent basis, but in a society of smart phones and convenience, it’s a trend that who knows how long it will last.”

Unfortunately, most delivery services charge on average 30%. Not to mention, the equipment, sign-up fees, and varying delivery fees, plus, yes plus, many increase your menu price by a percentage to enhabce themselves even more profit.

For smaller restaurants, this can quickly cut into their profits, and, at times, leave them in the RED.

Additionally, restaurants lose control when their deliveries are made by third parties. A bad customer service experience may not stop someone from using Door Dash, Grub Hub, or Uber Eats, but it may well cause them to avoid you in the future.

While you have no control over the individual delivering your food, they do receive a flat rate for each delivery they make, which is often up to $10 based on a variety of factors. In the end however, many drivers are heavily reliant on tips to make the gig worth their time.

If the delivery guy is unlucky enough to get hit with a long wait time at a restaurant or finds a non-tipping customer, then how does that effect their attitude? We think, not too good.

Imagine the impact if buyers saw the image above forFree Delivery in your Local Marketing? We bet you’d be calling direct. We would.

It’s over 27 years since we started working with 100’s of local Eateries and as part of the development of the New adspayMAX.com incorporating our Groucherz System, we analyzed exactly what the CEO of Domino’s was talking about. Use Local outlets to sell to Locals.

We’ve researched what the Big City Franchisees now think and what a large selection of Local Restaurant Owners also think. We saw household established local brands DROP the out of state on-line systems that were milking them dry. We saw many also DROP local expensive print ads and re-think their strategies.

We showed them how buyers easily access eateries and menus on their smart phones without downloading an app. A simple click to find the product they wanted and a nominal fee to save from 25% – 75%, while maintaining profitability with locals, yes locals.

The strong personal relationships we had created over the years were being eradicated by the big out of town power houses. The NUT you had to swallow to create sales had gone from a PEANUT to a COCONUT.

That marketing NUT has increased heavily through rising Paper, Print and Post Office costs. The food cost NUT is now totally NUTS, but is the only way out to now increase menu costs? To some degree our analysts believe so, but not entirely as we still must:

• Put your Business in Front of Local Targeted Buyers.

• Offer incentives for Locals to buy from you.

How do we do that. How do we Cut the PORK and Reduce the NUT? You need to get smart and stop spending on huge marketing costs where 75% never reaches your Target Audience.

Work with a reputable company with solid experience who has made the change. Just think about this:

Did you buy or see others buy Yellow Page ads for 1,000’s of dollars each year? Do you still see that happen today?

Did you buy or see others buy Newspaper ads for 100’s of dollars each week? Do you still see that happen today?

Did you invest in an original Cell Phone years ago, that was as big as a building block? Would you buy the same phone today?

The answer is NO, NO and NO. The solution you see every minute of every day, with your eyes open, is in front of you.

Your SMART PHONE. I bet more than half of those reading this Blog are doing so on their phone, coz that’s where we are and at less than 10% of Print Media

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