Delivery Services Burgeon
With increasing demand for instant delivery of all goods, including food, delivery services will continue to thrive and gain market share throughout Covid, being the new lifeline for many consumer and food operator alike.
With Deliveroo, Uber Eats and Just Eat revolutionising the market, during the third quarter of 2020, there were 46.4m food delivery orders in the UK, an increase of 43% over the same period in 2019. Uber Eats have seen their business double since lockdown, and Just Eat is now a £6bn business, with Deloitte predicting the delivery market to grow to an estimated £19bn by 2023.
This new burgeoning industry is rapidly gaining market share, however is this to the detriment of the food operator. Some would say yes as there are joining fees, commissions of between 13% and 35% plus VAT and the consumer is also charged. One must ask, is this a case of the ‘tail wagging the dog’ and another overhead slashing profits in a struggling industry.
However, new entrants into this market are providing similar delivery services for a flat fee to the consumer only, which should help smaller food businesses to reach out to new customers, increasing volume. One such operator is easyFood from EasyJet founder Stelios Haji-Ioannou, which charges the customer a flat £3.99 per order and is using a franchise model, and local taxi networks. Other smaller delivery firms, run by ex-employees from the larger operators are springing up on a local area basis, and again, are charging a flat delivery fee to the customer of around £5.00 per delivery. This will be a game-changer for local pubs and family run businesses that want to tap into the delivery market, but until now could not afford to do so.
Regardless of Covid, we still need feeding three times a day, and with innovative cooks who left the industry in 2020 starting new ventures, going it alone, setting up pop-ups, new restaurants, community kitchens, box schemes and street food stalls, and with pubs stepping up, operating as local shops and ‘take-aways’. Getting food out to the consumer and the community by whatever means possible seems to be the common thread linking all these ideas, and delivery services will continue thrive.