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Restaurants Shrink as Food Delivery Apps Get More Popular (bloomberg.com)
People are still eating restaurant food -- they're just not doing it at restaurants as much. From a report: Delivery apps from DoorDash, Postmates, GrubHub and UberEats have made ordering in easier, and have changed the way food chains think about their business. The number of food delivery app downloads is up 380 percent compared with three years ago, according to market-data firm App Annie, and research firm Cowen and Co. predicts that U.S. restaurant delivery sales will rise an average of 12 percent a year to $76 billion in the next four years. At Firehouse, revenue has increased 7 percent this year, mainly from orders placed online and through delivery apps, Fox said. More than half of his sales are for food eaten elsewhere.
[...] Some new restaurant owners are skipping tables and chairs altogether and just leasing kitchen space to prepare food for couriers. Those are called cloud kitchens or virtual restaurants because they have no dining rooms or wait staff and sell their meals through the internet and mobile apps like DoorDash or UberEats. Mark Chase, the founder of Restaurant Real Estate Advisors, a consulting group that helps restaurant entrepreneurs find space and negotiate leases, said that the majority of his clients are interested in the kitchen-only business model. "There is a general scaling down on seating space and scaling up on kitchen space, as people just want to eat at home, on the couch," Chase said.
[...] Some new restaurant owners are skipping tables and chairs altogether and just leasing kitchen space to prepare food for couriers. Those are called cloud kitchens or virtual restaurants because they have no dining rooms or wait staff and sell their meals through the internet and mobile apps like DoorDash or UberEats. Mark Chase, the founder of Restaurant Real Estate Advisors, a consulting group that helps restaurant entrepreneurs find space and negotiate leases, said that the majority of his clients are interested in the kitchen-only business model. "There is a general scaling down on seating space and scaling up on kitchen space, as people just want to eat at home, on the couch," Chase said.
I am no liberal sympathy-monger riding on the bandwagon of local / artisanal / anti-gentrification / etc that thinks that all technology is bad. But the issue of how local restaurants are surviving is one that has hit home more than others. Specifically, how a lot of small restaurants, "mom-and-pop" to shorthand it, are at the mercy of middlemen, essentially who are extracting the profit out of the industry.
Small restaurants have never been great at marketing, being super efficient in delivery, or getting rewarded with outsized profits for the service they provide, and now this layer of tech middlemen has come in to squeeze out the profit even more.
I read the story about how Doordash and their ilk (I forget the specific service mentioned in the story exactly, but similar ordering service) basically takes over a restaurant's phone number, publishes it and diverts and monitors their calls to make sure they're paying an agreed % cut of every order. Even if Doordash did essentially nothing value adding for that order. The customers don't know anything different -- they're just ordering from their favorite restaurant using a convenient method.
So basically the restaurant and its workers become a labor slave to Doordash because customer traffic has been channeled through Doordash, even though the restaurant has enough patrons to exist on its own. They pay a cut for people being able to press a button and have food appear, rather than walk down to the restaurant, or call the legit restaurant's phone number.
So, how is the small guy ever to overcome the power of tech companies in a situation like this? Or how can you ever turn a profit as a small company when tech talent is out there to squeeze you as soon as you do?
Pretty soon, I could imagine that we'll just become a country of order takers from some tech overlords, and be dominated by flavorless food dictated by corporate efficiency recipes. It's a little disturbing.
I *like* dining in a restaurant. If it's not busy, I'll even bring my phone and headphones and watch some Netflix. It's relaxing and sometimes you meet others. And it's a good reason to go for a walk outside of the house.
I suppose this attraction to dining rooms will be a reason for my eventual grandchildren to call me old. Harumph!
Fast food? Yeah I'll have that to go.
Mediocre chain establishment? I'll have that to go.
Trendy fashionista place that serves kale and rabbitfood with a side of pretentious? I won't even spend a dime there, but if I had to, it'd be to go.
Family-owned restaurant one has been visiting for the past 10 years? Nope, I'll make time to go there, have that glorious just-brewed tea, nod to the chef and without a word, food magically appears, to my taste, and eat while watching the kitchen do their thing.
Not every restaurant deserves going to. Those that do... treasure them and treat them well.
The "Civilized World" jumped the shark ca. 1973.
http://www.al-awa2el.com/%D8%AA%D9%86%D8%B8%D9%8A%D9%81-%D8%B3%D8%AC%D8%A7%D8%AF-%D8%A8%D8%A7%D9%84%D8%B1%D9%8A%D8%A7%D8%B6/235-%D8%B4%D8%B1%D9%83%D8%A9-%D8%AA%D9%86%D8%B8%D9%8A%D9%81-%D8%B3%D8%AC%D8%A7%D8%AF-%D8%A8%D8%A7%D9%84%D8%B1%D9%8A%D8%A7%D8%B6
iPhone users must have just received another update....
I think it has more to do with the complete lack of fixed location.
These places can more easily move around to match demand, increase and decrease capacity.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
"Those are called cloud kitchens"
So.... because someone uses a phone to order delivery food, it's a cloud kitchen?
I always thought those were called takeout places. Or Chinese restaurants.
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What else would you call it? Its a place who's primary purpose is to serve food. Its not fine dining, or a particularly good restaurant, but its a restaurant.
No, its a lot of people of all ages. I can get out of work at around 7, find a restaurant, hope they have a seat, wait for 30 minutes until they do, then get seated and go through an hour long process to eat. Or I can go home, hop on an app on the subway and order dinner delivered, have it arrive 20 minutes after I get home, and eat in a quick 15 minutes and get on with my evening. And I don't need to deal with waiters, crowds, noise, and I can do whatever I want while waiting and eating- shower, watch tv, play games, etc. Almost none of that is possible in a restaurant. Its the same reason why movie theaters are losing to home movie watching.
They're not going to totally replace restaurants of course. Restaurants also serve the purpose of a place outside the house to meet, and many meals taste better hot out of the kitchen. But they'll definitely reduce the amount of dining in.
If there's any demographic divide, it will be urban/rural. The apps make more sense in urban/suburban areas with high restaurant density (especially in old east coast cities where apartment kitchens leave much to be desired).
I still have more fans than freaks. WTF is wrong with you people?
Even a takeout place still has a storefront, typically in an area with foot traffic. In a big city a space like that is a lot more expensive than a room on the third floor of a nondescript office building. All it needs is water, power, and ventilation.
The right to protest the State is more sacred than the State.
It is also not a good idea to base a business on a lowering trend as well.
However it is difficult to determine what is a fad and what is a trend.
A lot of people didn't get Color TV's because they though it was Fad, but it was a trend.
A lot of people bought 3d TV's because they thought it was trend, but it was a Fad.
Mail Order was a fad which got killed by Box Stores, while Online Shopping (nearly the same thing) is a trend which is killing Box Stores.
The big Grocery Stores took over the Mom and Pop corner shop, but didn't do much against the convince stores.
Now Restaurants are pushing the idea of the experience, while Millennials just want the food. Especially for the low - mid range restaurants (Think many of the chain restaurants). Where the food quality is OK, but not worth the hassle of going to a restaurant, waiting for your turn, getting bugged by waiters. Having to sit and wait for your food, be sure you behave so you don't get kicked out...
Now this could just be a fad, as Millennial get older and more mature, will want to go for more of the experience. Or it could just be a trend, of wanting the restaurant food, at the home experience. Where you can just be relaxed.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
I will admit that I have taken advantage of the fact that many fast food places make it easy to order online - I’ve done that many times (although I generally pick it up myself).
But I also like the social nature of restaurants. It’s fun to share a meal with friends, sitting around and laughing, watching people walking by outside, etc. I can’t imagine always “eating in” - that would be sad and boring.
#DeleteChrome
Only if they're operating illegally- do you know what a pain in the ass it usually is to get approval from the local city, county and/or state health department to operate a commercial kitchen??
Going out to lunch, going for a nice walk, and sitting down for 45 minutes is seen as anti-social and unproductive. After all, you could be working more and having lunch at your desk like a good little worker-bee.
But often no place to sit down -- I recall a few even had bulletproof Lexan between the waiting area and kitchen. This was in a less-posh part of DC about 10-15 years ago.
I go to restaurants because I like the experience. Some I go to because they're small shops where the owner is the guy in the kitchen cooking my food and waves to me.
My favourite restaurant is one my wife and I will only go to 2-3 times a year, because we're going to sit and have several courses, drinks, and desserts and then walk home. But the head waitress knows us by name, and the chef/owner is 10 feet away making my food and occasionally chatting with me, and will happily tweak dishes within reason for our tastes.
I have no intention of letting these tech companies be the ones getting the money, and I've even heard in a few cases restaurants have stopped supporting Uber Eats because Uber didn't pay them, or that the Uber driver is stealing the food.
No thanks, I'll support local business, and not some douchy tech company in California. Bummer for the Uber drivers who are essentially making nothing, but that was never viable economically and not my problem.
My hard working waitress who brings me fresh beer, smiles, and checks in on me ... I'm far more interested in making sure she gets a nice tip, because she's probably been friendly to me and recognised me and made sure I had a good meal -- and I'm old enough to place value on that.
I have an affinity for the service industry, because unless you're an asshole, there's lots of nice, hard-working people who do their best to give you a good experience. They deserve the tips and everything else, not Uber.
I just hope this idiotic 'everything is an app' culture doesn't keep wrecking the good bits of our actual culture.
Good luck getting groceries to run a commercial kitchen up to the third floor, even with a freight elevator. Not to mention irate occupants of neighboring units from smells of cooking, delivery-guy foot traffic, etc.
I just cook or (OMG!) go pick stuff up myself when I'd doing takeout. I get to walk a bit, no waiting for a messenger while the food gets cold. I also can pay good, old-fashioned, cold, hard cash, which is better for a small business than a crap card and delivery appitty-app taking a cut of their proceeds.
and who pays when the 1099 driver gets in a crash? and there auto insurance does not pay as they don't don't cover Commercial use?
lot's of pizza places are pickup / delivery only with maybe an very small seating area for waiting.
No, only WRT to a food truck (which is already a huge PITA).
Still, it's easier to move a kitchen than it is a storefront + a kitchen (does not apply to food trucks).
There's also potential to lease from a place that does breakfast lunch and then you do deliveries dinner late night.
When I was in nola there was a pop-up restaurant space (nola was obsessed with pop-ups, there were pop-up festivals around every corner in the garden district) that basically offered daily kitchen rentals, I can't speak to the legality, but it was clearly in a commercial space and the owner seemed like a stickler for rules.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
You tip someone who walks 50 feet indoors to deliver food to your table, but you don't tip someone who has to bike or drive for minutes to hours, often in bad weather? That's barbaric.
How do you meet others if you are watching Netflix?
Now I feel old.. I can't even imaging going to a restaurant and watching TV on my phone.. with headphones on... like.. WTF?
Good point: pay restaurant prices plus the delivery markup to eat on your couch? Unlike the mall movie experience, the restaurant experience is still much better than being at home.
Agreed. There are a few places I'll specifically go to because the atmosphere is great, or because the employees are awesome, or because it has an awesome view or whatever.
But I'll be honest - I just checked, and there are 12 different indian places on my Uber Eats list. I don't feel like driving 20 minutes across town to buy some food from one of these random places. Not to mention, my average delivery tip is $4, plus an average delivery fee of $3. I typically end up tipping at LEAST that much when I go to an actual restaurant... so why would I ever go to an actual restaurant? More expense for the same food in a less comfortable location predicated by a 20-30 minute drive? (not to mention, I can only have one beer because I still need to drive home). Yeah, aside from a few exceptions, there's no good reason to bother with it.
There's a reason these things got popular, and it's because going out to most restaurants isn't a great experience.
But what bothers me is the fact that ANYONE uses the ones that make you tip *before* the actual food arrives. It'd be like walking into a restaurant and tipping your future waitress. Uber Eats is the only one that doesn't do this in my experience, and once I discovered that, I deleted the other apps and never looked back. What a ridiculous layout. Who puts up with that!?
Well, I don't think we should have mandatory tips, period. A tip should be a tiny bit extra if someone provides exceptional service. It should not be an expected minimum that the restaurant assumes so they can underpay their staff.
I don't see the problem with this. It's not sacrificing market-share, rather opening it up to what otherwise would be a no sale. I've been to various restaurants where I much preferred dining in vs taking out, but I've done the takeout as well. For that exact same restaurant, the advantages of dining in include a hot meal, service, no cleanup, and socializing. With takeout, the food is just placed in plastic buckets or foam, isn't as appealing, but can eat when I want, how long I wish, and where at home. Bonus, can watch a move and whatnot.
Life is not for the lazy.
What I really like about this model is that eating good food becomes reasonable. While I am a decent cook, I don't have the ingredients on hand to make whatever I want any time. If I order food my money goes into food and I can drink iced tea for pennies instead of $1.89 + tax & tip or even better, all the alcohol I want without paying $10 a drink.
Eating the entire meal out was reasonable when my wife and I first got married. Now with three kids, two who eat like adults, going out for a simple quick casual sit down meal costs $60-70 and $120 or more for a "nice" meal and that is before alcohol is considered.
sounds interesting but I hate to see the menu prices and the delivery charges then you need to tip. could get expensive. Personally I like going to restaurants and eat. it is good to have young pretty ladies talk and pay attention to me since I have gotten old and fat. Yea, I know they are only doing it for tips but still...
A lot of people bought 3d TV's because they thought it was trend, but it was a Fad.
Actually I think you'll find a lot of people bought 3D TVs because they made good TVs with high frame rates despite a fad feature they never ended up using. At least that's how it worked out for us. Our TV just happened to be a 3D one, it didn't at all come into the purchasing decision.
Seriously, you find kale pretentious? Isn't that a little pretentious?
Frankly, I hate the stuff, but I can't wrap my brain around acting superior to someone who does.
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It's like poke, or frozen yogurt, even this "food app" is a fad that will die off as the Millennials complete household formation and run out of cash to waste on food delivery that costs that much.
The smart ones will be buying meal recipe fridge/stoves that order all the components for their picky kids to eat, and cook their food at home from updated recipes. I call it Homer Cooking (tm).
-- Tigger warning: This post may contain tiggers! --
I don’t want to tip because I'm a cheap piece of shit.
Fixed that for you.
What I am surprised about are the places people go specifically to eat out closing up. Anecdotal, but the local PF Chang's closed its doors, along with two restaurants nearby (one small, another same size as PF Chang's). I get rising rents make businesses review their options, but it seems odd for so many restaurants being closed in areas where people eat out a lot.
Maybe it is just changing trends/demographics, but I really enjoy having meals out. Hope it doesn't go too far...
That was the problem in many busy cities like Silicon Valley or other university cities. You had a large party of 20 or 30 people, and wanted to go out for a work-day lunch to celebrate someone's promotion, but there wasn't anywhere large enough. Usually a group would have to be split up into separate tables, which really defeated the purpose of the party in the first place.
There was one restaurant places that was basically a large warehouse with rows of tables and several different kitchens. That solved the problem but for smaller quieter parties, everyone went to smaller restaurants
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There's always something worrying about a backstreet Chinese restaurant offering Mock Chow Mein.
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I live in two cities. One is wealthy. One in poor. In the wealthy city, people love to go out to eat. In the poor city, nobody goes out to eat.
It's really sad to see so many empty restaurants in this big city, and delivery people just taking out styrofoam boxes all night. It's sad. These people generally don't leave their houses. Walking around is unheard of (it's a very walkable big city). I don't where or if most people in this city socialize very much at all. I imagine they work all day, then come home and want to keep staring at a little screen all night because they're addicted, like most of their friends and family.
In the rich city, people like going out to eat. It's fun. You get to eat good food. You get to talk to friends and family. I'm kind of thinking that people in poor areas just don't do that anymore. The screen addiction is kind of insane there.
I don't respond to AC's.
Seriously, you find kale pretentious? Isn't that a little pretentious?
No, kale in and of itself just is. It is incapable of demonstrating emotion or .. anything.
The joints I've been to that make it a central part of "who they are" I find unbearably pretentious. They didn't waste any time in rubbing in how better life is *their* way vs the "normal" way.
So I stick to places that just serve delicious food without judgement or sermon.
I only visit the pretentious kind when I'm with coworkers of a certain culinary persuasion anyway. It's not by choice, it's out of politeness, and frankly, some of the food *is* quite nice. Just.. lay off the sermonizing, be it active by the staff, or passive by decor.
The "Civilized World" jumped the shark ca. 1973.
the restaurant experience is still much better than being at home.
Try that same experience with young children, and I guarantee you will rethink that statement.
Before kids, yes you are right on the money.
...I can still get my favorite programs without paying my (monopolistic) cable provider's rates?
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