3 April 2020 Courier Weekly

Food delivery apps will not save restaurants on their own

'We don’t have all the answers right now. But does anyone?'

In the wake of the economic destruction the culinary world has experienced over the past few weeks, there was meant to be one silver lining. Nationwide lockdowns and overloaded online grocery services sounded like perfect ingredients for a boom in food delivery apps. In turn, they would provide a lifeline to food businesses who have seen their physical restaurants closed down.

The early signs were positive. In the UK, Deliveroo announced that 3,000 new restaurants joined the platform in the past month. Suddenly it was even possible to order three-course Michelin star menus to your door, like beef short rib wellington, potatoes and crème brûlée from Alinea in Chicago.

But from speaking to multiple restaurant owners and sources working in the food industry, a less positive story begins to emerge. Stevie Parle, the chef-owner of Pastaio, Palatino and Craft London, wanted to keep cooking but says ‘the economics of delivery just don’t make sense. Despite what I had imagined, the restaurant delivery platforms haven’t seen huge growth.’

His views echo a recent report in the Financial Times, in which an executive that works with UK food delivery apps said ‘order volumes have fallen by as much as two-thirds in the past week’. ‘People simply aren’t getting all the meals they would have otherwise eaten out [at restaurants] delivered to them at home,’ says Stevie. ‘They’re worried about money and maybe hygiene standards, too.’

In London, Honey & Co, Kricket and Patty & Bun have all stopped offering takeaways. ‘It wasn’t an easy decision,’ says Sarit Packer, co-founder of Honey & Co, ‘but we had the growing feeling that asking our staff to come into work via public transport was potentially putting them at risk.’ While the Middle Eastern restaurant group has committed to keeping on all staff that have been with them for over a month, a ‘handful’ of new employees lost their jobs; a harsh reality that many restaurant owners are facing.

Before the UK government released legislation regarding job support, Kricket, a collection of modern Indian restaurants, was also looking at making redundancies. ‘We only did delivery for four or five days,’ says co-founder Rik Campbell. ‘The reason we stopped was because of the legislation saying that people could go on furlough and still get the support they needed. That, and the worry about the safety and ethics of staff travel.’

The legislation he is referring to allows UK employers to claim a grant for 80% of furloughed employees’ monthly wages (up to a maximum of £2,500 a month). In the US, the situation is so bleak it led David Chang, who has opened more than a dozen restaurants around the world, telling the New York Times: ‘Without government intervention, there will be no service industry… I’m not being hyperbolic in any way’. He went on to predict a ‘morbidly high business death rate’ for the restaurant and service industry. ‘The government should give a greater bailout package to real estate owners so that there can be relief for restaurant owners. It has to move up the chain.’

Gini Newton, co-owner of Karma Kitchen, a shared cooking space in east London, says that food companies selling on platforms like Deliveroo and Uber Eats are struggling. ‘The revenue expected in the first few weeks was not as high as what was predicted, and the market became overly competitive almost overnight,’ she says. ‘But the businesses that deliver directly to their own customer bases are booming. These companies have loyal followings and are going into overdrive to deliver meal kits and food boxes 24-hours a day to people at home.’

Four Legs, a chef duo from north London, are carrying out their own deliveries in the local area, taking orders via Instagram DM only. Camden’s The Cheese Bar is running a similar operation. Since it launched in mid March, The Cheese Bar’s delivers almost a tonne of cheese on peak days. If they continue at this current levels of trade, founder Mathew Carver estimates they will take in over £500,000 of sales a year.

In France, however, food delivery apps are currently performing better. Taster is a food delivery company that launched in Paris 2017 and now has 12 dark kitchens (including in London and Madrid). Its digital-only, ‘virtual restaurant’ brands such as O Ke Kai, Take-Out Thai and Mission Saigon have experienced a surge in demand over the past two weeks. But when the 15-day nationwide lockdown was announced on 17 March, demand dropped by as much as 40%.

According to Taster’s founder Anton Soulier, ‘The first phase was really about anxiety, with a lot of people food storing and eating food at home. But once you’ve been at home and cooked your own carbonara 10 times, you’re probably going to fancy something else, right?’

Still, he adds, there are other concerns aside from demand. ‘The biggest challenge for us has been protecting and supporting our staff as well as our supply chain. Any staff that show symptoms are sent home immediately,’ he says. ‘Talking to the suppliers, some of them have told us that we’re pretty much their only customer left. A lot of the country’s supply chains have already been completely disrupted. There’s practically no salmon or fish in Paris right now because the boats aren’t operating. It’s tough out here.’

While continuing to deliver food, sell ingredient boxes and offer coupons might be a feasible short-term fix for many restaurants – and an essential service for those who give them custom – it will unlikely provide a long-term solution to the larger problem at hand. ‘We don’t have all the answers right now,’ says Sarit of Honey & Co. ‘But does anyone? All we can do is hope that the government will step in and ask landlords to allow a rent-free period to help the industry survive this crisis.’

Illustration: Timothy Durand

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