The Dilemma
The pandemic has forced QSRs to rely more heavily on third party delivery services, and the fees they charge restaurants are racking up as more people choose these channels. Services like UberEats and GrubHub take anywhere from 15% to 30% of the cut from orders placed through their platform, a number that has grown dramatically during the pandemic. Some QSRs including McDonald’s, Chick Fil A, and Chipotle are raising delivery menu prices to compensate for the loss.
Drive thru restaurants that up delivery prices can do so due to the fact that many customers are still wary of indoor dining and rely on delivery to get their food. The larger the customer base and demand, the more leverage they have to fiddle with prices. Chick Fil A has a massive following, which is part of the reason they have been able to hike prices by almost 30%.
Like Chick Fil A, Chipotle is testing raising delivery prices, but up to a smaller 17%. Chipotle is taking an extra step to offset costs by encouraging delivery orders through its mobile app so it has more autonomy over associated fees. These changes are critical to Chipotle’s margins because half of digital sales are funneling in from delivery.
It seems like QSRs have found answers to the delivery dilemma, yet whether upcharging customers is a good idea remains to be seen.
Is the Emerging Model Going to Work?
Is increasing prices on delivery menu items the right solution for QSRs? While this strategy may help them return to previous margins, it comes at a cost to the loyal customer who may notice and become dissatisfied. By taking this risk, drive thru restaurants may deter customers and damage their brand perception. As they adjust to the new normal, QSrs need to find good ways to balance out delivery costs, which requires some intentionality and cost-benefit analysis. Drive thru restaurants might explore alternatives to transferring unexpected costs to their patrons.
The Presto Solution
Restaurants seeking an alternative solution to this predicament should look no further than Presto. Presto is leading the restaurant industry with solutions such as digital menu board technology, which promotes faster service and makes the drive thru experience seamless and engaging. Presto supports ordering and payment at the drive thru, parking lot, walk-up window, and via takeout with its contactless dining solution. This QR-code based system makes customers feel safe trying out these modes. Partnering with Preso can convert a percentage of customers ordering through third parties to choosing alternative channels of order pickup. Customers still enjoy commensurate convenience, and QSRs can see a reduction in guests ordering through delivery services.If your restaurant could benefit from innovative technology solutions like contactless technology, contact us today to schedule a demo.
