It’s no secret that the restaurant industry is competitive. Restaurant owners have to fight for every customer that they bring in; they fight against competitors, meal kits, supermarkets, and home cooking. Over time, this competition has gotten even more intense as the restaurant industry becomes increasingly over-saturated and regulated.
The number of restaurants within the industry has continuously increased throughout the past decade. In 2001, there were 165.1 restaurants for every 100,000 Americans.
Now, that number is up to 189.8 - a 15% increase. This makes the market more competitive and customer loyalty even more difficult to obtain.
This explosive growth of restaurants has even made finding cheap labor competitive. There is a shortage of labor entering the restaurant industry. This shortage is due to a variety of factors: fewer teenagers in the workforce, uncertainties of undocumented workers, low unemployment rate, etc. Just 4 years ago, there were 56 teenagers in the labor force for every casual restaurant; now, there are less than half of that (NY Times). Plus, wages are increasing. This increase cuts directly into restaurants’ margins, which makes it even harder for them to turn a profit.
Each of these things culminates in creating an industry that is cut-throat competitive. So, how are restaurants like Chipotle, The Cheesecake Factory, and some of your local favorites still managing to thrive? They have discovered the power of delivery.
Delivery gives these restaurants a competitive edge: it is the most successful, low-effort way for restaurant owners to grow their businesses. This is true because all types of people throughout the country use delivery--delivery is universal. The overall awareness and usage of these apps has grown 5x since 2016, and DoorDash itself reaches 80% of consumers in the USA.
This means that restaurants on delivery apps are getting the opportunity to reach new customers that they otherwise wouldn’t have, and bring in business that they would have otherwise been missing. Delivery brings in those incremental orders, while adding virtually no extra costs. Restaurant owners don’t have to find extra space or hire new cooks--they already have the labor and ingredients, delivery just brings them more orders. This means that restaurants can make up to 60% profit on incremental order (whereas profit is typically ~10% on regular orders).
DoorDash understands the delivery industry better than anyone else. We are the largest provider in North America and are still the fastest growing food delivery platform, with a 300% growth rate year over year. We are also consistently fast and convenient, which is what keeps all types of customers coming back: 91% of our deliveries are on time or early, with an average delivery time of only 37 minutes.
Lastly, DoorDash truly values our restaurant partners--which is why we have a dedicated team that provides 24 hour support and business growth opportunities. We give restaurants the resources they need (such as a free photoshoot and promotional options) to ensure that they catch the eyes of consumers on our app. We know that the industry is competitive, and we know that restaurant owners have to fight for each and every one of their customers. But here at DoorDash, we can give restaurateurs a low-effort, simple way to embrace that competition and set themselves apart.