Ordering in a meal is no longer just about going through a menu and selecting the option you want delivered to the home or wherever you are. That’s the easy part.
What’s nowhere near as easy is choosing which F&B (food and beverages) delivery app to press on the smartphone to make that transaction happen.
Should you go with the one offering a straight discount for first-time users? Or stick with the tried and tested delivery provider? Or are there other options to pick, and where there are more benefits being thrown in to sweeten the deal?
These are the choices UAE consumers — and its F&B operators — are grappling with. Every other month seems to bring in a new F&B online order and delivery platform trying to catch the eye and become a contender. Joining the fray recently was Careem, trying to recreate its obvious strengths in the local ride-hailing business into food delivery services as well.
From the outside, it looks as if the F&B industry is spoilt for choice — that each of these delivery platforms are an extension of the restaurant or café’s business reach. But is it as easy as that?
“If a delivery aggregator (such as Deliveroo, Uber, Talabat or Zomato) can generate orders on its own, deliver those for the F&B operator and charge between 15-20 per cent of the order value, it is definitely a commercially viable proposition for the F&B operator,” said George Kunnappally, Managing Director for the UAE operations of the casual dining chain Nando’s.
But if the delivery services were directly owned by the F&B business, “a delivery bike driver needs to do at least five to six deliveries per shift for an invoice value of about Dh100 to only cover the cost of the fleet and the call centre,” said Kunnappally. “So, unless each driver averages above 12 orders per shift each day without a drop in the average transaction value, there is hardly any money to be made in deliveries.”
And the last two years have not been easy for restaurants in the UAE. Many operators realised that even a good location may not be able to generate enough business to sustain it … especially if rents are going to eat up a good chunk of their cash flow.
