Food businesses with ‘dark' kitchens can take advantage of online delivery: Regency Purchasing Group
The procurement specialist warned, however, that delivery may not work for everyone.
With a predicted value of £9.8bn by 2021, food delivery is fast becoming an important segment in the market which brands operating in so-called dark kitchens can “really take advantage,” according to Regency Purchasing Group.
The procurement specialist, citing data from MCA Foodservice Delivery Report 2018, noted that 60% of adults in the UK have been ordering food delivery twice a month with an average spend of £9.47 per head per order.
Businesses can benefit from lower business rates and rents as dark kitchens, which are units or container in an industrial area dedicated to preparing food for delivery, do not necessarily have to be located in high streets. Reduced labour costs is also a plus considering there is no need for front-store staff.
“Food businesses that can really take advantage of online delivery are those operating from a dark kitchen because they don’t have the same operational costs,” Regency Purchasing Group managing director Alex Demetriou said in a statement.
Demetriou underscored that sharing premises and costs in operating in dark kitchens is a “great way” for quickly building both start-ups and established brands.
He also noted that food delivery “may not work for everyone,” though it hardly impacts in-store dining revenues.
“The charges for partnering with online food delivery companies are usually high and therefore most of the margin is stripped out. Some brands are so conscious of not being left behind in this highly competitive market, that they are using the food delivery service knowing that they will only break even, but they have factored into their plans the distribution of marketing materials with the food deliveries to try to get customers to physically come into their outlets.”
He adds: “Third party delivery gives access to a totally different customer, and therefore the data show it rarely impacts the revenue from in-store dining.”
Regency Purchasing Group works with more than 3,000 leisure businesses across the UK, including hotels, pubs and known attractions, among others.
