Marketing: Today in Restaurants

Large restaurant companies like Yum Brands, parent company of Pizza Hut, are perhaps best poised to weather the up-to 40 percent fees collected by third-party delivery companies. They’re also best poised to negotiate a favorable rate with these companies given their size and scope. Where does that leave smaller businesses that rely on third-party delivery services?

Partnerships with Grubhub, Uber Eats, and the like notoriously offer restaurants increased order volume, due to targeted advertising on mobile apps. Business owners can also afford to cut back on in-house drivers, with delivery operations being outsourced. Any decrease in business will also lead independents to unplug from aggregators, and rely on internal delivery channels, Many businesses are starting to realize that these marketplaces are making them a lot busier, but at the end of the week, they’re working twice as hard and are not as profitable,

Papa John’s and Pizza Hut have more resources to better leverage the market and negotiate down fees charged by delivery companies. Additionally, a disparity in price points favoring chains could steer customers away from local businesses.

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