The current crisis should be a boon for home takeaway food delivery services in the UK, but is proving to be anything but.
With the country in lockdown, huge queues at supermarkets and grocery delivery services overwhelmed, this would seem to be a perfect recipe for food delivery outfits, like Uber Eats, Just Eat and Deliveroo.
But the Financial Times reports that, over the past week, UK takeaway orders have actually dropped sharply as consumers worry over the threat of infection and turn to home cooking.
The problem has been worsened, it says, by the number of restaurants closing, notably some of the food delivery brands’ most in-demand names, like McDonald’s and Wagamama.
The lack of business is likely to squeeze many in the country’s already-under-pressure restaurant sector.
The FT quotes an executive working with food delivery apps as saying order volumes are down by up to two-thirds in the last week, with the fall most extreme in central London. In particular, lunch orders for office workers have virtually disappeared.
“The analysts are predicting huge growth in takeaway delivery, but that’s not what we are seeing,” the executive said.
“Volumes are down quite substantially,” another food delivery executive told the FT. “Consumers are super scared.”
Pubs and restaurants were ordered by the government to close last Friday. Several big brands, including McDonald’s, Greggs, Nando’s and Wagamama, had hoped to switch to food delivery and collection services, but have since closed their branches completely over concerns for staff safety while the COVID-19 crisis continues.
Food industry consultant Peter Backman told the FT he had hoped the lockdown would prove to be “a bit of a boost” for delivery apps. Now he foresees possible “carnage” in the restaurant sector.
“The delivery companies themselves don’t seem to be doing brilliantly,” he added. Uber Eats, Just Eat and Deliveroo are all offering incentives to restaurants, such as lower commissions and quicker payments. And Deliveroo has launched a TV ad campaign to announce it is “here to deliver”.
“We are working closely with restaurants to optimise their operations for delivery, and we are doing everything we can to make sure people still have access to the food they need at this difficult time,” a Deliveroo spokesperson said.
The decline in orders is likely to be compounded by the UK government’s undertaking to pay 80% of couriers’ usual earnings, as this acts as a disincentive to couriers to sign on to delivery apps, Backman observed.
Sourced from Financial Times; additional content by WARC staff