How To Save Your Favorite Restaurant
#OrderDirect — Restaurants will love you for it!
—
UPDATE: The piece below was included in an NBC News story on 3rd party delivery apps and their effects on the restaurant industry on May 21. While preparing for that interview, I compiled some of the things that we did to get more direct orders in April to stem the initial wave of customers that we lost to app orders in the first 2 weeks after the Safer at Home orders were given. I’m publishing a list of *some* of the things we did as a way to help you “Win Your Restaurant Customers Back.” I hope it’s a useful resource for restaurant owners and possibly some other, non-restaurant, small businesses who will soon be allowed to open up for curbside take out or delivery service. Good luck!
—
You’re hungry, your pantry looks like the grocery shelves in a horror movie, and you’re craving kabob, pad Thai or that juicy burger from the local spot you love, so what do you do?
Before you pick up your phone and press buttons on a delivery app like GrubHub, UberEats, or Postmates, think about the restaurant you love. If you want them to exist in the short or long term, close that app and order directly from them the old-fashioned way: call them, or as we did in the early days of the internet --> go to their websites first.
This advice applies all the time, but is especially important now. If your favorite restaurant is open, then by law, they can only do take out or delivery. Ordering directly from them lets them keep more of the sale.
They don’t deliver, you say? Call them and ask because you’ll be surprised at how many have figured out delivery options - and if they haven’t - they’ll refer you to the lowest priced apps they’re on. BUT, if they have already figured out delivery, then please order directly from them.
My family’s restaurant, ASLAN Mediterranean Cuisine, has been in operation for 33 years in Los Angeles, and I can’t explain to you how much you will be helping ALL the restaurants that you love by ordering directly from them. With that simple act, you will be putting an extra 30% in their pockets because the UberEats, GrubHubs, Postmates, etc. take up to that much of a restaurant’s revenue — off the top — on every order.
Short of giving away free money, ordering direct is the best thing you can do to help the restaurants you love survive this pandemic!
These tech delivery companies start their relationships with restaurants by enticing them with the promise of new customers — but over time — some of the the restaurant’s existing customers migrate over to become the platform’s users. Before restaurants realize it, they become captives to the Faustian bargain they made at the beginning. Since customers get the exact same meal they’re used to, they don’t realize that they’re actually ordering from billion dollar “broker” companies, rather than the mom & pop business they’re getting their food from, and who they love.
Our customers love us more than any billion dollar company ever will!
Before the coronavirus created this existential crisis for restaurants, the delivery companies were already draining small restaurants of crucial revenue. While delivery volume information from these companies is hard to find, this piece about “5 Food Delivery Stocks Seeing Increasing Sales During COVID-19 Crisis” touches on their increasing popularity.
These companies have taken advantage of the opportunity by offering customers “free delivery”, which further drives more of a restaurant’s customer base into these platforms. Sensing a David vs. Goliath narrative forming, Uber publicly touted their “Free Delivery” offer as an effort to help independent restaurants, but if you read the article closely, you’ll see the subtle, but effective wordplay — nothing in this or other similar stories that came from that release talk about the fees restaurants pay.
GrubHub meanwhile created a marketing gimmick which was very disadvantageous to small businesses and is still getting blowback. Because of how these companies’ models are affecting small restaurants during this pandemic, the City of San Francisco announced an emergency order capping the fees that they can charge restaurants at 15%.
These companies are framing their efforts as saving independent restaurants, but if they really wanted to help, they could do as DoorDash did and reduce their fees during this pandemic.
Long term, these platforms are not sustainable for restaurants. If they are used strategically (i.e. complementary part of a restaurant’s approach to finding and retaining new DINE-IN customers), then the fees can be seen as acceptable marketing and logisitics costs. If restaurants aren’t careful though, they could end up ceding a precious share of their take-out & delivery revenue to a 3rd party “partner”.
Restaurants — on average — have a food cost that is between 25–35%; wages take up between 20–30%, and fixed costs range between 5–15%. When sales volume is high, restaurants can keep costs on the low end of the spectrum, but during times like this, costs balloon up to 70–75% on every order. You can see how losing 30% of each order’s revenue to a delivery company means that restaurants are basically working for free on those orders.
Do the tech companies realize their current model is analogous to the fable of the Scorpion and the Frog? Eventually, everyone’s going to drown.
As an essential industry, restaurants have an exemption to stay open, but only for delivery and take-out. Every restaurateur we know has agonized about: Having to reduce hours and let loyal staff go; Worrying about how they’re going to pay their bills; Taking items off their menu because they can’t regularly find the ingredients they need, and; Ensuring the safety of their staff and families while they interact with take-out customers, delivery drivers, and on shopping days.
The prudent ones among us have limited our shopping days and locations to ensure the safety of our staff, which unfortunately increases input costs because we don’t always shop where the groceries are the cheapest anymore. Like most restaurants in America, our costs are fixed, but we understand that our customers are hurting as well. We have decided to shoulder the increased costs of our inputs, but that becomes even more difficult as we’re being drained of much needed revenue by our delivery “partners.”
The survival of many small, family run restaurants depends on their customers’ willingness to cut out the middleman and #OrderDirect.
What we, and many restaurant owners have found is that Americans genuinely want to help their favorite local restaurants survive, and are doing so by: Ordering take-out and delivery; Rallying around efforts to feed first responders; Donating to causes that help those in need of nutritious meals, and; Supporting programs that ensure a healthy diet for our nation’s children. Americans are doing this while supporting some of the remaining small business that are allowed to operate. Thank you!!!
Please, help the restaurant you love by ordering directly from them. If you do, I promise you, they’ll love you right back!
#BonApetit #ԲարիԱխորժակ #BuenProvecho #καλήόρεξη #بالعافية #نوشجان
A version of this commentary was published on April 9, 2020 in the print edition of The California Courier. This piece was linked to by NBC News in a May 21, 2020 story on how restaurants are rebelling against the 3rd party delivery apps.
About the Author
Rostom Sarkissian is a Los Angeles-based public affairs professional with over 20 years of experience in campaigns, project management, non-profit development, government & media relations and small business marketing. Sarkissian holds a Master’s degree in Public Policy from Harvard University’s Kennedy School of Government. His family’s restaurant, ASLAN Mediterranean Cuisine, has been serving Mediterranean food with a Lebanese, Armenian & Greek flair in Los Angeles since 1988.
