As a nation in lockdown, takeaways offered a welcome break in the lives of those under house arrest. But while the ‘big three’ delivery platforms – Deliveroo, Just Eat and UberEats – experienced a huge surge in demand during this time, the restaurants and takeaways that make up our food didn’t make as much profit as you might think.
Every year, eateries across the country pay the Big Three over £1 billion in commission. With commission rates usually as high as 30-35 percent, you would be hard-pressed to find a restaurant owner who says you can make decent money through delivery orders alone.
Take a normal £20 food order. An outlet should expect approximately £11.11 gross profit if they sell directly to the customer (once VAT and cost of goods sold are accounted for). If that restaurant uses Deliveroo, they will lose £7.00 in commission, reducing the outlet’s gross profit to just £4.11.
This is a frustrating and often debilitating situation for small business owners trying to build a sustainable business.
I should know. For seven years I put my heart and soul into NY Slice, the New York pizza brand I created and brought to life in Glasgow. The vision was a national roll-out. An outlet in every UK city, serving delicious NY-style pizza by the slice. We were going in the right direction.
But then we hit a big rough COVID-sized roadblock. The lockdown meant closing our restaurant and switching to 100% delivery and collection. We were confident that our loyal customer base would help us make our transition online, but we quickly realized that by using third party delivery platforms like Deliveroo, we were unable to make a good margin on the food we made.
Over the past five years, the total commissions paid by NY Slice to the Big Three would have enabled us to open two more NY Slice delivery sites. effect? Sadly, we had to turn down NY Slice.
My personal experience working under Delivery Platform inspired me to create Gravy, a 0% commission delivery platform and marketplace designed to deliver a fair deal to the restaurant and takeaway industry.
Our community-owned platform encourages users to order directly and make money only when our partners make money. We don’t charge membership fees unless the restaurant generates a minimum of £100 per week in revenue through the Gravy Marketplace.
Local, independent businesses provide the economic and social support needed for communities to thrive, create real, local jobs, and pump money directly into the local economy. By supporting our local high roads, our local economies and local communities can thrive, making our villages, towns and cities better places to live, work and travel.
We believe that by changing the way our customers run their takeaway and delivery businesses, we can help them create a better future for themselves.
Chris McCall is the founder and CEO Gravy, a zero-commission food delivery and collection marketplace for independent restaurants and takeaways. Gravy Hospitality helps businesses by earning better margins on the food they make and sell for delivery or collection.
Gravy is launching its Crowdcube campaign later this year.
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