Delivery vs. Takeout? VSAG Has the Answers

VSAG co-founder coverDan Simons was recently quoted as a topic expert in the QSR Magazine article “Delivery vs. Takeout,” which examined dining trends and consumer opinions on delivery and takeout services.  The logistics and operational challenges posed by delivery and/or takeout are just some of the areas in which VSAG provides solutions and ideas for profitable execution of these foodservice strategies.  An excerpt from the article:  When it comes to delivery, packaging can make or break you. More often than not it does the latter. “We need some brilliant engineers to create packaging that goes beyond holding the food without spilling, packaging that separates and then allows for mixing of ingredient, that can be easily labeled and doesn’t require an environmental heart attack for the end user who has to dispose of all of it,” says Dan Simons.

Surveys show the dining experience continues to be reshaped by consumer needs and desires. In a recent poll conducted by Technomic, Inc., consumers were asked how they would prefer to receive their takeout food. A surprising four out of ten consumers said they prefer to have food delivered, tying the number opting for carry out. Additionally, almost half of all women surveyed preferred home delivery. Consider those numbers in the context of a social climate that no longer views dining out as a special occasion and the opportunity for growth in quick-service delivery is apparent, provided the restaurant can generate a steady stream of orders.

But before buying car toppers and hiring drivers, operators should take into account all that is involved in offering home delivery—and take a look at their current operation model.

Take menu for example. Some foods lend themselves to delivery. Others, not so much. Cold sandwiches, salads with dressing on the side, and wrapped items like burritos are the kind of dishes that travel best, according to Robert L. Sandelman, CEO of California-based Sandelman & Associates. What doesn’t travel well, he says, is quick-service’s most popular item, french fries. “Fries get soggy and lose heat quickly,” Sandelman says. “The second half is less good than the first half. It’s the same with burgers; they cool quickly and the buns can get soggy due to grease or condiments.”   For a burger chain trying to get into delivery, that means the right packaging is critical for a successful program.

Then there is the matter of additional labor. Drivers must be recruited and trained. “Answering phone calls at store level presents the conflict of higher labor costs versus poor service,” Simons says. “Who should you ignore: the customer at the counter or the ringing phone? Also, who checks the order before the delivery person picks it up for delivery? Other questions to consider include is there space to package and hold orders for delivery and is the space visible to dine-in customers?” A new point-of-sale system designed for delivery might also be needed.

In weighing all factors, don’t forget to consider the all-important bottom line. Deliveries should be targeted to large groups of people yielding a larger ticket, according to Sandelman. “Delivering one sandwich wouldn’t be efficient. Once you tack on a delivery charge, the customer might pay more for the delivery than for the item.” He also points out that few delivery orders include drinks, a high-profit item for quick-serves.

Still, some of the biggest names in quick-service have considered or experimented with delivery. McDonald’s tested programs in the United States and Great Britain. KFC and Subway franchisees can choose to deliver in some parts of the country. Some Boston Market stores were doing delivery through July 2006 but general delivery has since been phased out, says Kelly Heisler, spokesperson for the Golden, Colorado–based company. “We phased out delivery to focus on our restaurants, but we may consider adding delivery services in the future,” she explains.

Other concepts continue to operate successful programs.

Read the full article.