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Pros and cons of restaurant delivery vs take-out

restaurant delivery vs take-out

In 2024, restaurant owners face a critical decision: should they prioritize delivery or takeout?

The answer isn’t simple. Both takeout and delivery options come with unique advantages and challenges that can make or break your bottom line.

Delivery can boost sales and reach new customers, but high commission fees and quality control issues can eat into your profits.

Take-out offers convenience and cost savings but may limit your customer base and revenue potential.

So, which path should you choose? In this guide, we’ll dive deep into the pros and cons of restaurant delivery vs takeout, providing expert insights to help you make an informed decision for your business in 2024 and beyond. Restaurant Delivery Advantages: Boost Revenue and Reach New Customers

  • Expand your customer base and increase sales

  • Streamline operations and reduce costs

  • Enhance brand visibility and customer loyalty

Popularity of the Restaurant Delivery vs Take-Out Options

60% of U.S. consumers order delivery or takeout once a week

Restaurant Delivery Advantages: Boost Revenue and Reach New Customers

Expand Your Customer Base

By offering delivery services, restaurants can reach customers who may not have visited their establishment. This includes people who live outside the restaurant’s immediate vicinity, those with limited mobility, or individuals who simply prefer the convenience of having food delivered to their doorstep.

According to a survey conducted by the National Restaurant Association, 60% of consumers say they would be more likely to order food from a restaurant if delivery was available. This highlights the significant potential for restaurants to tap into a wider customer base by offering delivery services.

In today’s fast-paced world, many people have limited time for dining out. By providing delivery options, restaurants can cater to busy professionals, parents with young children, and others who may not have the luxury of sitting down for a meal or eating out at a restaurant.

Increase Sales and Revenue

Offering delivery services can lead to a significant increase in sales and revenue for restaurants. Online ordering platforms and mobile apps make it easy for customers to browse menus, place orders, and pay for their meals, often resulting in larger order sizes than in-person dining.

A report by Morgan Stanley found that delivery orders tend to be up to 20% larger than in-restaurant orders. This can be attributed to several factors, such as the ease of adding items to an online cart, the absence of social pressure to limit order size, and the ability to upsell and cross-sell through targeted recommendations.

Delivery platforms also provide opportunities for restaurants to capitalize on impulse purchases. By showcasing appealing images of menu items, offering limited-time promotions, and suggesting complementary dishes or beverages, restaurants can encourage customers to add more items to their orders, ultimately boosting revenue.

Streamline Operations and Reduce Costs

Implementing a dedicated delivery system can help restaurants streamline their operations and reduce costs in several ways. By optimizing kitchen efficiency and reducing front-of-house staffing requirements, restaurants can focus on producing high-quality meals for delivery while minimizing overhead expenses.

Additionally, offering delivery services can help restaurants make the most of their existing space. By reducing the need for additional seating and parking, restaurants can operate more efficiently and potentially expand their business without incurring most people the costs associated with a larger physical footprint.

To successfully incorporate delivery services, restaurants may need to adjust their kitchen operations. This can involve creating a separate area for delivery orders, assigning dedicated staff to handle packaging and dispatching, and investing in equipment that maintains food quality during transport.

While these changes may require an initial investment, they can ultimately lead to increased efficiency and profitability. By streamlining kitchen processes and ensuring that delivery orders are fulfilled promptly and accurately, restaurants can improve customer satisfaction and encourage repeat business.

Enhance Brand Visibility and Customer Loyalty

Participating in delivery platforms can help restaurants increase their brand visibility and reach new audiences. Many popular delivery apps and websites feature restaurant listings, ratings, and reviews, providing valuable exposure to potential customers who may not have otherwise discovered the establishment.

Moreover, by consistently providing high-quality food and exceptional delivery service, restaurants can foster customer loyalty and encourage repeat orders. Positive reviews and word-of-mouth referrals can further amplify a restaurant’s reputation, attracting even more customers over time.

Mobile Ordering and Customer Loyalty Program

45% of consumers say that offering mobile ordering or loyalty programs would encourage them to use online ordering services more often

To maximize the benefits of delivery services, restaurants should actively engage with customers on social media and maintain a strong online presence. This can involve sharing appealing photos of menu items, highlighting special promotions, and responding promptly to customer inquiries and feedback.

By cultivating a strong brand identity and engaging with customers across multiple channels, restaurants can build a loyal following and establish themselves as go-to destinations for high-quality food delivery.

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Take-Out Disadvantages for Restaurants: Balancing Costs and Quality

High Commission Fees

Third-party delivery services like Uber Eats and GrubHub have become increasingly popular, but they come at a cost to restaurants. These services typically charge substantial commissions, ranging from 15% to 30% of the order total. For a $50 order, a restaurant could be paying up to $15 in fees, significantly impacting their profit margins.

Restaurants often feel pressured to partner with these services to remain competitive and reach a wider customer base. However, the high commission fees can make it difficult for restaurants to maintain profitability, especially for smaller, independent establishments. Some restaurants have reported losing money on delivery orders due to these fees, leading them to question the long-term sustainability of relying on third-party services.

Restaurant Delivery Service Statistics

70% of consumers prefer ordering directly from a restaurant, preferring that their money goes straight to the restaurant and not a third-party

Potential for Quality Control Issues

When customers dine in a restaurant, the staff has full control over the food’s quality, presentation, and temperature. However, with take-out orders, the restaurant’s control enjoy food only ends once the food leaves the premises. This lack of control can lead to potential quality issues during transport, such as cold, soggy, or spilled food upon delivery.

Negative customer experiences resulting from these quality control issues can have a significant impact on a restaurant’s reputation. In the age of social media and online reviews, a few dissatisfied customers can quickly spread negative feedback, potentially deterring future customers from ordering from the restaurant.

To mitigate quality control issues, restaurants must invest in high-quality, temperature-controlled packaging. This packaging should be designed to maintain the food’s temperature, texture, and presentation during transport. However, these specialized packaging materials come at an additional cost, further cutting into the restaurant’s profits.

Restaurants must also consider the environmental impact of their packaging choices. Many consumers are increasingly concerned about the waste generated by single-use packaging materials. Balancing eco-friendly packaging options with cost-effectiveness can be a challenge for restaurants looking to minimize their environmental footprint while maintaining profitability.

Increased Packaging and Supplies Costs

In addition to the cost of specialized packaging materials, offering takeout food services also requires restaurants to invest in a variety of disposable supplies. These include cutlery, napkins, condiments, and other items that are typically provided to customers dining in the restaurant.

The cost of these supplies can add up quickly, especially for restaurants with high volumes of takeout orders. Restaurants must carefully monitor their inventory and ordering processes to ensure they have sufficient supplies on hand without overstocking and wasting money on unused items.

Despite the increased costs associated with offering take-out services, many restaurants feel compelled to do so to remain competitive in the market. Customers have come to expect the convenience of being able to order their favorite meals for take out or delivery, and restaurants that don’t offer these options risk losing business to those that do.

To balance the costs and benefits of offering takeout, restaurants must carefully analyze their profit margins and make strategic decisions about menu pricing, packaging choices, and partnerships with third-party delivery services. Some restaurants have chosen to absorb the costs of delivery fees and packaging to maintain customer loyalty, while others have raised prices or added service fees to offset these expenses.

Ultimately, the decision to offer take-out services and how to manage the associated costs will depend on each restaurant’s business model, target market, and financial situation. By carefully weighing the pros and cons and making informed decisions, restaurants can navigate the challenges of offering takeout while still providing a high-quality customer experience and maintaining profitability.

Food Delivery Service Impact on Restaurant Revenue: Navigating the Pros and Cons

  • Food delivery can increase sales but may reduce profit margins due to commission fees

  • Balancing delivery and dine-in experiences is crucial for maintaining quality and atmosphere

  • Adapting menu items and packaging can optimize delivery performance and customer satisfaction

Growth of the Delivery Service Industry

Food delivery services are expected to grow from $3.7 billion in 2023 to $90.3 billion by 2030

Increased Sales Volume

Food delivery platforms like Uber Eats, DoorDash, and Grubhub have become increasingly popular, allowing restaurants to reach a wider customer base beyond their local area. By partnering with these services, restaurants can attract new customers who may not have visited their establishment. This expanded reach can lead to a significant boost in sales volume, especially during off-peak hours or slow periods.

According to a study by the National Restaurant Association, 80% of diners are ordering online the same or more than last year, indicating a continued growth in digital orders for restaurant delivery. This trend has continued, with many customers opting for the convenience of online food ordering even as dining restrictions have eased. By capitalizing on this growing trend, restaurants can increase their revenue and adapt to changing consumer preferences.

Reduced Profit Margins

While food delivery can increase sales volume, it may also lead to higher costs and reduced profit margins for restaurants. Third-party delivery services often charge high commission fees, typically ranging from 15% to 30% of the order total. These fees can significantly cut into a restaurant’s profits, especially for smaller, independent establishments.

In addition to commission fees, restaurants may also face increased labor costs when dedicating staff to handle delivery orders. This can include hiring additional kitchen staff to keep up with the increased volume of employing delivery drivers if the restaurant chooses to handle deliveries in-house.

Another potential downside is the reduced average order value for delivery compared to dine-in. Customers may be less likely to add high-margin items like appetizers, desserts, or beverages when ordering for delivery, further impacting a restaurant’s profitability.

Balancing Delivery and Dine-In Experiences

As restaurants navigate the pros and cons of food delivery, it’s essential to maintain a balance between delivery and dine-in experiences. Ensuring consistent food quality and presentation for delivery orders is crucial to maintaining customer satisfaction and encouraging repeat business. This may require investing in specialized packaging that keeps food at the proper temperature and prevents spills during transport.

At the same time, restaurants must not neglect their dine-in experience and atmosphere. The ambiance of the dining room and the service provided in-house are often key factors in attracting and retaining customers. By focusing on both delivery and dine-in, restaurants can diversify their revenue streams and adapt to the changing landscape of the food industry.

As restaurants weigh the impact of food delivery on their revenue, it’s essential to carefully consider the pros and cons and develop strategies to maximize profitability while maintaining quality and customer satisfaction. By staying informed about industry trends and best practices, restaurants can navigate this evolving landscape and position themselves for long-term success.

Dining Out and Dining In

Food delivery is more popular than dining out — 77% of customers ordered delivery while 61% dined in

Restaurant Take-Out Benefits: Convenience and Cost Savings

Customer Convenience and Flexibility During Ordering Food

In today’s fast-paced world, many customers value the convenience and flexibility that restaurants take out offer. By providing the option to order meals for pick up, restaurants cater to customers with busy schedules or limited time for dining out. This is especially beneficial for those who want to enjoy restaurant-quality food in the comfort of their own homes.

Takeout also provides a convenient alternative to cooking for large group orders or catering. Instead of coordinating a sit-down meal at a restaurant, customers can easily place a large order for pick up, ensuring that everyone in their group or event has access to delicious, freshly prepared food.

Reduced Labor and Overhead Costs

For restaurants, offering takeout can help reduce labor and overhead costs. By focusing on take-out orders, restaurants can eliminate the need for a dedicated delivery driver or staff, which can be a significant expense. This is particularly beneficial for smaller restaurants or those with limited budgets.

Additionally, take-out orders can help reduce front-of-house staffing requirements during off-peak hours. With fewer customers dining in, restaurants can operate with a smaller team, reducing labor costs without sacrificing the quality of their food or service.

Take-out also minimizes costs associated with delivery-specific packaging and supplies. While restaurants may still need to invest in takeout containers and utensils, these costs are often lower than those associated with delivery, such as insulated bags and fuel for delivery vehicles.

Maintaining Control Over Food Quality

One of the key advantages of takeout is that it allows restaurants to maintain control over food quality. When customers pick up their orders directly from the restaurant, they receive freshly prepared and fine dining meals that haven’t been subjected to the potential quality degradation.

To further ensure food quality, restaurants can provide guests with clear instructions for reheating or assembly, if necessary. This helps customers enjoy their meals as intended, even if they’re not consuming them immediately after pick up.

By offering takeout, restaurants can provide customers with a convenient and cost-effective way to enjoy their favorite meals, while also reducing labor and overhead costs and maintaining control over food quality. As consumer demand for convenient dining options continues to grow, takeout is likely to remain a popular choice for both customers and restaurants alike.

Choosing Between Takeout and Delivery: Factors to Consider

Target Customer Demographics

Understanding your target market is crucial when deciding between delivery and take-out services. Different age groups, income levels, and lifestyles can influence the demand for these options. For instance, millennials and Gen Z consumers are more likely to use food delivery apps compared to older generations. They value convenience and are willing to pay a premium for it.

Popularity of Takeout or Deliveries Among Millennials

59% of restaurant orders from millennials are takeout or delivery

Restaurant Concept and Cuisine

The type of cuisine and menu items your restaurant offers can greatly influence the success of delivery or take-out services. Some dishes may travel better than others, maintaining their quality and presentation during transportation. For example, pizza and Chinese food have been popular takeout and delivery options for decades due to their ability to retain heat and taste during travel.

On the other hand, more delicate or temperature-sensitive dishes, such as sushi or souffle, may not be as well-suited for delivery. In these cases, it’s essential to consider specialized packaging or preparation methods to ensure the food arrives in optimal condition. Investing in high-quality, insulated containers and training staff on proper packaging techniques can help mitigate potential issues.

If you decide to offer delivery or order takeout take-out services, it may be necessary to adjust your menu to prioritize items that travel well. This could involve:

  1. Creating delivery-specific menu items that are designed to maintain their quality during transportation

  2. Offering family-style meals or bundle deals that are easy to package and serve

  3. Providing clear reheating instructions for customers to ensure the best possible experience at home

By carefully considering your restaurant’s concept and cuisine, you can make informed decisions about the feasibility and success of delivery and take-out services.

Operational Capacity and Resources

Implementing delivery or take-out services requires a thorough evaluation of your restaurant’s operational capacity and available resources. One major consideration is whether your kitchen can handle the increased order volume without compromising food quality or in-store dining experiences. This may require investing in additional equipment, such as packaging materials or warming stations, to streamline the process.

Another factor to consider is the cost and logistics of offering delivery services. If you choose to handle delivery in-house, you’ll need to hire and train dedicated delivery staff, purchase vehicles or bicycles, and manage schedules and routes. Alternatively, partnering with third-party delivery platforms like Uber Eats, DoorDash, or Grubhub can alleviate some of these responsibilities but may come with higher commission fees and wait time.

Ultimately, the decision to offer delivery take-out services should be based on a careful analysis of your restaurant’s capacity, resources, and financial viability. By weighing these factors and considering the potential benefits and challenges, you can make a well-informed choice that aligns with your business goals and target market’s needs.

Making the Right Choice for Your Restaurant

In today’s fast-paced world, offering delivery and take-out options can significantly boost your restaurant’s revenue and customer base. However, it’s crucial to weigh the pros and cons of each approach to determine the best fit for your business.

Delivery services can help you reach a wider audience and increase sales, but they come with challenges like high commission fees and potential quality control issues. On the other hand, take-out offers convenience for customers while allowing you to maintain control over food quality and reduce labor and transportation costs.

When deciding between delivery and take-out, consider your target customer demographics, restaurant concept, and operational capacity. By carefully evaluating these factors, you can make an informed decision that aligns with your business goals and enhances your customers’ dining experience.

Are you ready to take your restaurant to the next level? Assess your options and implement a strategy that maximizes your revenue potential while delivering exceptional value to your customers.

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