Food Delivery Platforms: Will they eat the restaurant industry’s lunch?
On-demand food delivery platforms have exploded in popularity across both the emerging and developed world. For those restaurant businesses which successfully cater to at-home consumers, delivery has the potential to be a highly valuable source of incremental revenues, albeit typically at a lower margin.
Over the longer term, the concentration of customer demand through the dominant ordering platforms raises concerns over the bargaining power of these platforms, their singular control of customer data, and even their potential for vertical integration. Nonetheless, we believe that restaurant businesses have no choice but to embrace this high-growth channel whilst working towards the ideal long-term solution of in-house digital ordering capabilities.