Since the pandemic, there has been a call to stay in our communities and to support local eateries to help them and their staff to survive the fluctuating restrictions that have been placed on the food and beverage industry, well all businesses for that matter.
When supporting local businesses lets make sure that the revenues for your food and beverage purchases are truly staying in the communities these businesses serve. It is super convenient to use one of the highly marketed food delivery apps like UberEats, DoorDash, and SkipTheDishes. However, consumers need to be aware there is a high cost associated with that click and order convenience for these international delivery apps.
If you have used any of the above-mentioned food delivery apps then you know that the customer pays a delivery fee of up to $5.99 upfront for these services. But did you know that the bulk of the costs of these food delivery services are in hidden commission fees of 20-30 percent that the restaurants must pay to offer these services to their customers.
According to Statistics Canada data, the average Canadian restaurant has a profit margin of only 4-6 percent, yes, those numbers are correct! This means many of the restaurants that offer and use these highly nationally advertised apps, lose money with every purchase made through these 3rd party delivery apps.
During the pandemic with government-imposed restrictions on in restaurant dining along with customers staying home and adhering for calls for us to social distance and limit traveling within our communities, things have gotten worse for restaurant owners and their staff with Statistics Canada data also showing a decline between 14 to 35 percent in restaurant food and beverage sales since the pandemic.
So, I know what you’re saying to yourself right now, if restaurants are losing money, why do restaurants use these third-party apps? Well, the answer is simple, because of the successful marketing campaigns by these third-party apps companies’ business cannot afford not to be listed as a restaurant that offers these services so that they can be seen by the potential customer’s aka hundreds of thousands of apps users. “I cannot do without them during Covid, I tried,” says Boneheads BBQ owner Cindy Wheatley. “Even though I don’t make a profit with them I need the cash flow to keep the business going; I feel a responsibility to my staff and all my loyal customers to survive this.”
Wanting to keep the doors to Boneheads BBQ open for takeout, she wanted a solution to limit her losses from having customers use third-party apps, Wheatley approached marketing and design firm Visual Voice in Truro, Nova Scotia. “Boneheads BBQ was already doing everything they could by setting up for take-out, online ordering and local delivery,” explained Visual Voice’s director Nuri Guerra “the problem was down to educating the consumer about the impact their use of these apps is having on the eateries.” As the latest covid lockdown hit the Halifax Regional Municipality, well all of Nova Scotia for that matter, Wheatley and Guerra’s response was to launch the website EatsNotApps.com to raise awareness of the issue and promote, free-of-charge, any and all HRM restaurants that offer other forms of delivery or take out. The site includes links to restaurant websites with enticing photos and a map listing their locations.
Sadly, since the recent launch of the website EatsNotApps.com, some of the restaurants listed have had to close either temporarily or permanently.
The restaurant industry is built on loyal customers and that comes from restaurateurs offering more than just great food but more importantly a fantastic customer experience whether the customer is dining in, grabbing takeout or using delivery where the only point of contact for the restaurant is the delivery driver. Which brings up another issue with third-party delivery apps.
As a restaurateur, do you want your only point of contact with a customer be a driver, who is trying to make ends meet by transporting as many orders from different apps and restaurants as possible. I know the places that I order from all have in-house delivery staff that I have come to know over the years, long before the Covid-19 cloud hit the restaurant business. They know me and I know them, it is like a family friend knocking on the door, but better because I am hungry, sometimes even hangry, and they are bringing me food hot and ready to eat.
“At Boneheads we have seen drivers carrying as many as 10 orders,” Wheatley added. “The food sometimes arrives cold or with misplaced/missing items giving a bad impression of the restaurant even though we have no control over it.” Worse yet is that any issues with the order get charged to the restaurant, pushing the 30 percent app fees even higher. “In our experience as many as 1 in 10 orders placed through apps has an issue,” says Wheatley “which is outrageous compared to our in-house efforts where the error margin is approximately 1 in 50.” To make matters worse some restaurants are unwilling participants and are listed for these third-party delivery apps without their consent.
The convenience of ordering through third party delivery apps hurts independent, local restaurants and takes most revenue to their headquarters, based elsewhere in Canada or the USA, not in Nova Scotia.
The Nova Scotia government has announced capping the delivery fees for 3rd party apps temporarily which is a step in the right direction for local businesses using these services, however the way in which this will be implemented and or enforced has not been communicated yet.
The bottom line remains that the best way to show support for your local restaurant is to always order direct whenever that is an option.
We along with Guerra and Wheatley hope that EatsNotApps.com will aid hungry Haligonian find a local eatery offer amazing foods and alternative delivery and take-away methods to help these local restaurants and their staff survive the Covid-19 cloud, while supporting the local economy and in most cases saving themselves money all at the same time. Making it a win-win for restaurateurs and customers.
by Lee Ann Atwater