Tag Archives: café

Olo Is Not Everyone’s Food Delivery Staple | Instant News


It is as if the online food delivery industry not convoluted enough, apparently there are other intermediaries.

Unlike

ByDash

and

Grubhub,

15 year old Olo is not a name your average eater will know. From a consumer’s point of view, that is largely behind their experience of ordering online from a restaurant, helping the chain with things like third-party order integration and fulfillment. It competes with online delivery platforms in some aspects of its business, but considers it a significant customer on the other. It also boasts another key difference: Its business is designed to be more like a software as a service company.

Food delivery, but make it SaaS, basically. In filing its initial public offering last month, Olo gave investors an idea of ​​the advantages most food delivery platforms have yet to achieve on a sustainable basis. Even DoorDash, which increased revenue by 226% in 2020, is still losing money for the year. But Olo says it generates more than $ 3 million in net revenue in 2020 from revenue growing at less than half the rate of leading US food delivery platforms.

However, it is not clear how easily the profits can be recovered. Unlike typical SaaS models, where the business has significant visibility into future revenue thanks to up-front paying contracts, Olo calls itself a “transactional SaaS” model, where revenue comes not only from subscriptions but also from costs per transaction. This last source of income is important because it now forms the majority of its business: Although Olo says less than 7% of its revenue came from transactions in 2018, that percentage is growing to nearly 57% in 2020.

That mix of businesses alone should make SaaS investors bite their fingers. But things become even more uncertain when you consider that food delivery platforms that hope to see a significant moderation in their pace of growth over the next year are some of Olo’s biggest customers. According to its filing, Olo provides DoorDash access to its order fulfillment, aggregator and channel management solutions. Transaction revenue from DoorDash accounted for at least 19% of Olo’s overall top line last year, up from 2.6% in 2018.That likely means the DoorDash pandemic-driven business boom was a key factor in Olo’s ability to turn a profit – Olo lost money in two the year before 2020.

Slows down growth not the only risk associated with DoorDash. Olo also disclosed in his public offering that his party was being sued by the company, which alleges a breach of contract related to fees. While Olo said the allegations were baseless, the more than $ 7 million DoorDash was seeking would be insignificant if given. Furthermore, the lawsuit could threaten to injure what is clearly a significant financial relationship for Olo.

Demand for food deliveries has surged amid the pandemic, but restaurants are struggling to survive. In a highly competitive industry, delivery services are struggling to gain market share while facing increasing pressure to lower commission costs and provide more protection to its workers. Video / Photo: Jaden Urbi / WSJ

Olo may be the newest food trading technology company to hit the public market, but it’s nothing new. Preceding DoorDash, Uber Eats and even Grubhub, the company says its name actually stands for “online ordering,” which in the dial-up era used to be three words.

Olo started his business long before, sending text message orders to printers before the world owned iPhones. Investors must now wonder if it has taken a front on its own.

Write to Laura Forman on [email protected]

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DoorDash’s Appeal Beyond Food | Instant News


Food delivery platform

By Dash

RUN -3.14%

it is now trading almost 90% on it initial public offering price such as a vaccine that is widely distributed in the US and restaurants in some of its largest markets are poised to reopen outdoor dining. So why isn’t this stock too short?

The answer may be more about comfort than taste. Apart from restaurant deliveries, DoorDash has built its market share in third-party shipments for other goods, such as items from 7-Eleven, Wawa, Circle K and CVS. Post-pandemic, those additional opportunities could prove more important to DoorDash’s growth thesis than bearish investors appreciated.

Much of DoorDash’s appeal ahead of its December IPO is how quickly it can go from 0 to 60 in food delivery. The company said it had only a 17% share of the US market in terms of total sales in January 2018 but that share had grown to 50% in October – nearly double that of its next biggest competitor, Uber Eats. Now it turns out that in newer markets such as practical freight forwarding, DoorDash has grown even faster.

A report from Edison Trends Thursday shows DoorDash now owns 58% of US convenience store spending via third-party delivery apps, more than double that of its next biggest competitor, goPuff. Last January, Edison Trends had DoorDash’s share of around 5% and goPuff’s 70%. For all of Uber’s talk of leaning heavily on additional delivery services, Uber Eats’ market share in third-party convenience goods is now just 8%, according to the report.

For DoorDash, the supermarket may be more than just the icing on the cake. According to Edison Trends’ analysis, overall online consumer shopping at convenience stores grew by nearly 350% in 2020, almost three times faster than online restaurant consumer sales. DoorDash customers increased their convenience store spend by 162% sequentially from the third to fourth quarters, according to EdisonTrends data – a good sign for DoorDash’s first earnings report as a public company to come later next month.

Opportunities beyond traditional food delivery appear to be a big part of what differentiates analysts who have remained positive at DoorDash from those who feel they are overvalued. In his initiation report, Truist analyst Youssef Squali pegged the potential addressable markets in groceries and convenience, including e-commerce and bricks and mortars, about $ 50 billion for the industry as a whole, with an additional $ 22 billion coming from specialty food stores and $ 60 billion came from beer, wine and liquor stores. With regards to a highly concentrated wholesale market, he notes that more fragmented areas such as fast delivery could be more profitable. Meanwhile, Angelo Zino from CFRA Research initiated coverage on DoorDash with a sale rating, not to mention the convenience opportunity.

Cautious investors worry that demand for food deliveries will ease as the pandemic eases, but that doesn’t mean demand in other areas will shrink. Analyst forecasts compiled by Visible Alpha show DoorDash’s average order value decreased 23% from 2020 to 2025, but monthly orders per active customer grew by nearly 30% during that period. More options should continue to bring more customers to the DoorDash platform, that is very strong in the suburban market practical shopping is not necessarily walkable Analysts estimate DoorDash’s monthly active customers will grow by 21% this year alone.

SHARE YOUR MIND

Have you used DoorDash to order groceries during the pandemic? Join the conversation below.

In its DoorDash initiation report,

JP Morgan‘s

Doug Anmuth called food delivery a “forever changing category,” noting that while growth may slow, activity will still pick up, given the value of convenience and consumer choice. He cites new verticals, such as convenience, grocery stores and pharmacies, as key growth drivers.

When it comes to restaurant outings, visiting a corner shop is always more of a chore than a gift. It’s possible that even though visitors are racing to return to eat after the pandemic, they will continue to order everyday items.

To DoorDash, that is indeed a comfortable narrative.

Ghost kitchens have sprung up across the US as food deliveries spike and restaurant dining slumps amid the pandemic. This business, which can organize food preparation for several restaurants in one location, is attracting interest from investors and restaurant owners. Photo: Adam Falk / The Wall Street Journal

Write to Laura Forman on [email protected]

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The CEO Behind KFC, Taco Bell Orders Fast-Food Growth To Go On | Instant News


David Gibbs just signed

Yum brand Inc.

YUM -0.87%

the first restaurant acquisition in years and is planning a convention for nearly 1,000 fast food franchisees worldwide when the pandemic cripples the global economy in March.

The sudden crisis threatens to wipe out most of the $ 17 billion that companies and franchisees make in annual dinner sales at all KFC, Taco Bell and Pizza Hut restaurants in more than 150 countries. Mr. Gibbs, a 31-year Yum veteran who became CEO a year ago, went from advancing the company’s expansion strategy to competing with thousands of closed restaurants.

Since then, many large fast food companies mostly recovered from the early pandemic close, and Yum’s comparable US sales rose in the third quarter from a year ago. But Mr. Gibbs said he was rethinking how Yum – which has more than 50,000 restaurants, more than any other fast food chain – could serve and deliver more food to carry over the long term.

He’s planning a future where pre-ordering fried chicken online is routine, and Pizza Hut customers can get their orders placed in their suitcases without having to walk into the restaurant.

Meanwhile, hundreds of his US Pizza Hut locations, most of which do dine-in businesses, have permanently closed.

The 57-year-old Gibb spoke to The Wall Street Journal via video from Yum’s largely vacant office in Plano, Texas. Below is an edited excerpt.

WSJ: What mistakes did Yum make at the start of the pandemic and how do you learn from them?

Mr. Gibbs: If I look back before the pandemic, I wish we had moved faster for Pizza Hut to be more delivery, run business and less dependent on on-site dining. We’ve talked about it for years. Sometimes large organizations can become bureaucratic. But I think we may be impressed even with ourselves in how fast we’ve spun.


“ I didn’t know that normal appearance was exactly like before the pandemic. Consumers may be more aware of cleanliness in restaurants, and we are looking for new ways to provide a safe environment. ‘


– David Gibbs, CEO of Yum Brands

WSJ: Drive-through has helped many fast food chains stay busy during a pandemic. How does that affect your development plans?

Mr. Gibbs: We’re working on a design that has multiple drive-throughs. The Australian business began building several test units with five drive-throughs in one building.

But the other part of the story is the roadside execution. You see it not only in the restaurant industry, but also in retail. This is good because of our peak drive-through constraints. No matter how hard you ride, you can still fit only X cars in a row.

WSJ: Should the front line workers get food and restaurant early access to vaccines?

Mr. Gibbs: We are very excited about this vaccine. When it’s my turn, I’ll be in line to get it. We hope all our employees get it. But we do know that there are others, such as frontline healthcare workers, who are ahead of us in the queue.

“We support the national minimum wage, and we will work under the minimum wage set by the government,” said Gibbs.


Photo:

Trevor Paulhus for The Wall Street Journal

WSJ: Once a vaccine is more universally available, will you ask employees to get it or have your franchisor consider it?

Mr. Gibbs: We are studying the matter right now and haven’t made any decisions yet. It is important to remember that 98% of our stores are run by these franchisees. So it’s more complex than we just mandating that every store needs to get a vaccine.

WSJ: Even when vaccines start rolling out, it’s unclear when life will begin to return to normal. When did you anticipate this to happen in fast food?

Mr. Gibbs: I didn’t know that normal appearance was exactly like before the pandemic. Consumers may be more aware of cleanliness in restaurants, and we are looking for new ways to provide a safe environment.

WSJ: What management actions have you taken that will survive the pandemic?

Mr. Gibbs: One of the biggest lessons I learned is the power of authentic communication versus the formal written memos someone might send. We bring together various groups of franchisees, corporate teams from around the world in video calls. We get hundreds of questions via the chat function – real time, without filters. We learn from that.

WSJ: Do you support a $ 15 minimum wage at the federal level and for your employer and franchisees?

Mr. Gibbs: We support the national minimum wage, and we will work under whatever minimum wage the government makes.

Mr. Gibbs said he hoped Yum “had moved faster for Pizza Hut to be more than a delivery, running business” when the pandemic hit.


Photo:

Joe Raedle / Getty Images

WSJ: How do you expect the dynamics between the CEO and the White House to shift in the new government?

Mr. Gibbs: We are excited to work with the Biden government and share their goal of building back better especially on the economy and fighting inequality. We have been in more than a hundred countries around the world for decades – we have operated in any political environment.

WSJ: The pandemic’s theme is menu simplification, but some customers say Taco Bell went too far in removing options. Were you surprised by the commotion when Taco Bell removed Mexican Pizza?

Mr. Gibbs: I’ve never been surprised by the passion our customers – especially Taco Bell – have for our iconic products. We can always bring back the Mexican Pizza at some point if the request is there.

WSJ: What is your pandemic tranquillizer?

Mr. Gibbs: I often pass through Taco Bell drive-throughs. We introduced grilled cheese burritos during a pandemic, and that’s the definition of a product that was so coveted for me and my college son.

Write to Heather Haddon at [email protected]

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The New California Law Could Ruin Some of the Growth for the Food Delivery Platform | Instant News


How valuable the restaurant choice is delivery platform growth over the past year? We can find out immediately.

The California bill is set to require third-party delivery platforms to declare agreements with merchants to ship food orders starting January 1. The bill will effectively end the growth strategy platform incl

By Dash

and Postmates have historically worked to rapidly increase their delivery footprint. Delivery platforms must remove so-called non-partnered food vendors, or whose agreements they do not have, from their California applications. Without a deal, delivery platforms can post restaurant menus without a permit, sometimes causing complications for restaurants such as overcrowded dining rooms with unexpected deliveries or orders for items the kitchen no longer makes.

While users may be surprised, the company itself is well prepared. DoorDash, for example, said in its public offering that more than 95% of its gross order value came from merchants who partnered in the nine months ended September 30. As well as,

Uber Technologies

Uber Eats said it was developing active partner restaurants by 70% from year to year in the third quarter.

The California bill won’t affect all players equally. The impact on Postmates, whose biggest market is Los Angeles, could be enormous. Postmates has 700,000 merchants on its platform, according to a September regulatory filing from Uber.

Of these, only 115,000 were partners at the time, according to the company.

Specifically in California, Postmates said it had 40,000 merchants who were not partnered in September when the bill was signed into law. They will have to leave the platform if they are not converted by the end of the year. Any potential impact will flow to Uber’s business since they acquired Postmates this year.

No major player is completely isolated.

Grubhub,

which has recently started adding non-partnered restaurants to its platform, may also see some of its recent reversed advantages. While the company has for years prided itself on only listing restaurants that have partnership agreements, the tremendous growth of competitors forced Grubhub’s hand to also add non-partnered restaurants to better compete.

According to the proposed regulations, Grubhub is growing its restaurant by offering 114% for the year ending September 30. As of the third-quarter submission, 55,000 of its 300,000 restaurants remained unpartified. While the largest market is New York City, it appears that a significant number of non-partnered restaurants are in California.

More broadly, many of the Covid-19 temporary assistance regulations cover food delivery commission limit in cities nationwide also includes increased transparency measures. Starting last week, for example, Minneapolis began requiring delivery platforms to obtain restaurant approval for services performed such as delivery. Similar regulations were passed in Philadelphia, Denver, Tucson, Ariz., And elsewhere. An assembly bill introduced in New York in November would ban unauthorized lists of food vendors on delivery platforms across the state.

While restaurant selection is just one of the many ways in which delivery platforms compete for consumer businesses, this is perhaps the most important. DoorDash, for example, now has a dominant market advantage over its US competitors, even though its food is on average not up to the fastest and loyalty program not cheaper than those offered by competitors. It is now believed to have the largest US partner merchant network. Much of that growth was achieved by asking restaurants to partner with them after demonstrating the platform’s value, not before.

The rules will increase barriers to entry, which may be the reason why some in the industry support them. But by requiring a partnership agreement up front, at least a percentage of restaurants will choose not to use any platform and just run it themselves. That could hinder industrial growth.

Write to Laura Forman on [email protected]

Copyright © 2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Food Delivery Costs: How to Avoid a $ 18 Burger | Instant News


In Caviar’s food delivery app for San Francisco, ShackBurger doubles from

Shake Shack

SHAK -0.85%

listed at $ 8.99, the same price as in-store prices. But by the time it reaches your door, it’s $ 18.91. Here’s a breakdown of nearly $ 10 in additional fees:

  • Tax: $ 0.76
  • Shipping cost: $ 1.99
  • Suggested tip: $ 3
  • Small order fee: $ 3
  • Service fee: $ 1.17

During a pandemic, people are willing to pay for shipping as a way to be careful when getting food and groceries. Following the first round of shelter-in-place orders, the suburbs pushed profitable first quarter to

By Dash Inc.,

RUN 7.87%

who has Caviar. In April, Instacart Inc. experienced a 500% year-over-year increase in grocery orders. Company buyer contractor become a front line worker overnight.

When the state updates restrictions on eating indoors and extend stay home orders across the country, shipping is taking priority once again. But consumers are increasingly wary of rising shipping costs, and companies are offering their users better deals, in exchange for loyalty. What’s the best way to save money? Pay attention to the details.

Cost is not the only source of additional costs. The price of individual items can also be added.

Costco,

for example, it does not require Instacart grocery delivery customers to have a $ 60 per year membership as in-store shoppers do, but Instacart charges a higher price on Instacart than at its warehouse, in addition to additional fees.

Rags Srinivasan, a pricing consultant, recently set a markup for his Instacart Costco order when a buyer mistakenly sent him the original receipt at the store. Instacart orders ended up about $ 20 higher. “This is convenience inflation, and it’s going largely unnoticed,” Srinivasan said.

Cost of Convenience

Comparing the price of groceries purchased at Costco in Mountain View, California, with what Instacart charges customers who order them shows hidden markups, in addition to shipping costs.

Price before shipping cost and taxes

Charmin’s toilet paper

30 ct.

Gift paper towels

12 ct.

Kirkland Strawberries

4 lb.

Coconut Milk Thai Kitchen

6 x 13.66 fl. ounce

Kirkland tortilla chips

40 oz.

Charmin’s toilet paper

30 ct.

Gift paper towels

12 ct.

Kirkland Strawberries

4 lb.

Coconut Milk Thai Kitchen

6 x 13.66 fl. ounce

Kirkland tortilla chips

40 oz.

Charmin’s toilet paper

30 ct.

Gift paper towels

12 ct.

Kirkland Strawberries

4 lb.

Coconut Milk Thai Kitchen

6 x 13.66 fl. ounce

Kirkland tortilla chips

40 oz.

Charmin’s toilet

paper, 30 ct.

Gift paper

towel, 12 ct.

Kirkland

strawberry, 4 lb.

Thai kitchen

coconut milk,

6 x 13.66 fl. ounce

Kirkland

tortilla chips,

40 oz.

An Instacart spokesperson said retailers set their own prices on the platform, and the company notifies customers on the app whether prices are the same or higher than in-store. He noted that Costco members can enter their membership number into Instacart to open member-only savings. A Costco spokesman declined to comment.

Rafi Mohammed, author of “The Art of Pricing,” finds the same applies to several restaurants on delivery apps. A Boston-based Italian restaurant, T Anthony’s, sells a large meat lover’s pizza for $ 19.20. At Uber Eats, the same pie costs $ 23.90. Prices at DoorDash and

Grubhub

lower but still high.

The difference helps cover Uber’s 30% commission, said Joe Rastellini, the restaurant owner. “Before, I only had my own driver and Grubhub. Then, because of the pandemic, I ended up adding new services, and when you sign up with them you have to play football. “

Mr Rastellini added that his restaurant website offers local delivery at no extra cost, apart from tips and taxes.

For many, the variety and convenience of delivery applications is worth the extra cost. However, you may be able to save by contacting your favorite restaurant directly.

Pak Mohammed expects shipping prices to fall after the pandemic. “Instead of going to the movies or playing football, we’ve spent the money on ordering,” he said. “Post-vaccine, people will want to eat out, and that will lower demand for delivery.”

That fee has gone down for some via subscription plans. You pay a certain amount monthly or annually in exchange for a reduced cost per order (and sometimes faster service). Are they worthy? Only if you order often enough. Here’s how subscription plans work for the most popular food delivery and grocery delivery services:

Instacart Express

Price: $ 9.99 a month; $ 99 a year

A decent monthly minimum: Three orders

Nonmember shipping costs: $ 3.99

Instacart membership waives shipping on carts of $ 35 or more. Benefits also include one hour of free pick-up and reduced service fees (1.9%, not 5% nonmembers). The service isn’t limited to groceries, either: Retailers including Best Buy and CVS are also on the app.

Instacart will shop for you at wholesale stores, Best Buy and CVS.


Photo:

Michael Loccisano / Getty images

Walmart

+

Price: $ 12.95 a month; $ 98 a year

A decent monthly minimum: Two orders

Nonmember shipping costs: $ 7.95

The new Walmart program is a new version of the now-deprecated Unlimited Shipping membership, which offers free shipping from local stores. With Walmart +, you can order same-day groceries from participating local shops between 7am and 8pm – and next day’s knick-knacks from Walmart.com – at no extra cost.

Free grocery delivery requires a minimum basket of $ 35. No orders from Walmart.com, but only items “shipped by Walmart” are eligible. Customers also save 5 cents per gallon on fuel at Walmart locations and gain the ability to scan and purchase in-store items from their cell phones – saving trips to the payment line.

Shipt

Price: $ 99 a year

A decent monthly minimum: One order

Nonmember shipping costs: $ 10

Shipt previously required annual memberships to get same-day delivery from retailers such as Target, Petco, CVS and Costco – plus many local grocery stores. Now the service, which is owned by Target, offers one-time tickets for $ 10. But if you order from Shipt at least once a month, the subscription is well worth it. Orders under $ 35 are still subject to a $ 7 shipping fee.

Amazon

Prime Now

Price (included in Prime subscription): $ 12.99 a month; $ 119 a year

A decent monthly minimum: Depends on your use of Prime

Nonmember shipping costs: N / A

Whole Foods, Amazon, and Pet Food Express same-day delivery programs are available exclusively to Amazon Prime members in select cities. Orders under $ 35 come with a $ 4.99 shipping fee. The Prime subscription also offers fast free shipping from Amazon.com and a large library of streaming media, including movies and music.

A driver prepares to make a delivery in Dublin, California.


Photo:

shannon stapleton / Reuters

DoorDash / Caviar DashPass

Price: $ 9.99 per month

A decent monthly minimum: Three orders

Nonmember shipping costs: $ 1.99 to $ 3.99

Food delivery subscriptions free shipping and reduce service fees (17% for nonmembers) across DoorDash and Caviar. Orders must be at least $ 12, and only works with participating DashPass restaurants. (Chipotle, yes; Panera, no.) While DoorDash is known to offer food delivery from national chains, the service added retailers such as Walgreens and CVS earlier this year.

Uber Eats Eats Pass

Price: $ 9.99 per month

A decent monthly minimum: Three orders

Nonmember shipping costs: Up to $ 3.99

SHARE YOUR MIND

What food delivery application do you use? How was the experience? Join the conversation below.

At eligible restaurants, you get a shipping fee waiver and a 5% discount on orders that meet a minimum of $ 15.

There are other ways to get free delivery from Uber Eats, but they’re not guaranteed: If someone near you orders food, sometimes you can pick the same restaurant and the shipping costs are lowered. Think of it as UberPool, but for your dinner.

Grubhub +

Price: $ 9.99 per month

A decent monthly minimum: Three orders

Nonmember shipping costs: Up to $ 3.99

Earlier this year, Grubhub launched this program with 100,000 participating restaurants across the US. Customers receive free shipping on orders $ 12 or more, and free food to pick up ($ 10 or less) each month. They also get access to elite customer service. The company offers a two-week free trial of the service.

Grubhub delivers in downtown Manhattan.


Photo:

fresh mike / Reuters

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Write to Nicole Nguyen at [email protected]

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