#7 Off premises strategy Part 1. 3rd party Food Delivery

<p>Who has done it well - Pizza –</p> <ul> <li>Why – Food type.</li> <li>Consumer acceptance</li> </ul> <p>Off-Premise Market Source: Technomic 2018 Next-Level Off-Premise</p> <ul> <li>47% Drive-Thru</li> <li>35% Takeout</li> <li>18% Delivery</li> </ul> <p>Players and Market share: (January 2020)</p> <ul> <li>Grubhub 30%</li> <li>Uber Eats 20%</li> <li>DoorDash 37%</li> <li>Postmates 10%</li> </ul> <p>Industry trends – Foodservice habits are shifting</p> <ul> <li>Order size: $33.68 check average</li> <li>High frequency: 2.5 average monthly consumer transactions</li> <li>I am increasingly replacing carryout with delivery. 30% somewhat or completely agree 18-34. Overall is 21% - Source: Technomic 2018 Next-Level Off-Premise</li> </ul> <p>Other things to consider:</p> <ul> <li>Gig economy and regulation</li> <li>Ghost kitchens</li> </ul> <p>Cost to you?</p> <ul> <li>Restaurants pay the services 15% to 30% fees for each order customers place through their platform. </li> <li>Negotiate the fee. They are battling now for market share.</li> </ul> <p>Cost to do it yourself:</p> <ul> <li>Staffing</li> <li>Drivers</li> <li>Cars</li> <li>W-2 staff cost about 30% more</li> </ul> <p>Pros:</p> <ul> <li>Increased top-line Revenue.</li> <li>May cut down on the cost of delivery.</li> <li>Caters to your customer’s wants and needs.</li> <li>Find new customers.</li> </ul> <p>Cons</p> <ul> <li>Customers are also less likely to ask for menu items that carry higher margins -- including soda and alcoholic drinks.</li> <li>Cannibalization - Restaurants risk cannibalizing their more profitable dine-in or take-out sales.</li> <li>Cold food</li> <li>Delivery services work with several restaurants at a time –</li> <li>Changing loyalties - Customer loyalty shifts away from the restaurant to the delivery service in third-party partnerships.</li> </ul>