Fast food outpaced in new delivery boom

Deliveroo-food-deliveryRestaurants are cashing in on the food delivery boom driven by the likes of Deliveroo and UberEATS, as the fast food industry proves slow to adapt.

Financial researcher IBISWorld forecasts revenue growth of two per cent for the restaurant industry in 2017/18, with the combined takings of 28,252 businesses to reach $21 billion.

IBISWorld expects that growth to reach 5.8 per cent in 2018/19, and revenue to surpass $30 billion in 2021/22.

Revenue for fast food establishments is forecast to rise by only 1.2 per cent in 2017/18, to $19.5 billion, while growth for cafes is forecast to be 0.8 per cent, to $8.1 billion.

Senior IBISWorld analyst Bao Vuong says food delivery apps including UberEATS, Deliveroo, Menulog and Foodora have changed the way time-poor customers dine, and how restaurants are run.

They allow customers to search beyond cuisine, price or rating, filtering options based on how quickly the food can be delivered, how close a restaurant is to their location, or whether delivery is free.

Vuong said some businesses have created delivery-only menus, pop-up shops without tables and seating, or separate pick-up counters for delivery drivers to cater to the growing trend.

The researchers found only a quarter of fast food restaurants have integrated new ordering and delivery platforms, and low revenue growth is a result of their lukewarm response to the innovative business methods.

McDonalds and KFC secured partnerships with UberEATS and Foodora respectively in June, Vuong said, despite both delivery applications launching in Australia in early 2016.

Red Rooster also recently appeared on Menulog, moving out of its suburban stronghold to feed customers in inner-city Sydney and Melbourne for the first time.

The new platforms have also prompted fine dining businesses – 39 per cent of Australia’s restaurants – to lift.

“Small tweaks such as improved customer service and enhanced ambience through lighting and increased customer interaction with chefs can go a long way towards combating these apps,” Vuong said.

In addition, hatted eateries including Sake (Sydney, Brisbane, Melbourne), Three Blue Ducks (Sydney) and Esquire (Brisbane) have all launched on UberEATS with scaled-down menus.

“The outlook for fine dining restaurants is strong because they place a premium on taste, while new ordering and delivery platforms mainly focus on convenience and price,” added Vuong.

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