Retail

Major Restaurant Chains Push For Lower Delivery Rates

Food Delivery

In an online food delivery service market that is becoming more crowded, some of the largest operators of restaurants are renegotiating with the firms that bring takeout to consumers. While restaurants were once fast to sign up for delivery services, they are now seeking lower rates as competition in the space is heating up, The Wall Street Journal reported.

According to unnamed sources in the report, Applebee’s, McDonald’s Corp. and Cousins Submarines Inc are just some of the companies looking for lower commissions as well as higher spending on discounts and marketing. And, while restaurateurs say that high fees cut into profits, they do reportedly note that more promotional spending, as well as lower fees, could encourage more restaurants to offer delivery and pave the way for more diner choice.

Consultants and executives say, as noted by the report, that delivery services usually take an approximate 25 percent portion of an order. At the same time, unnamed sources cited in the report that investments to put delivery partnerships into place in addition to other fees can also cut into the margins of a restaurant.

The news comes after news surfaced that Amazon is preparing to shutter its Amazon Restaurants food delivery service. GeekWire, citing Amazon as of a June 10 report, noted the service will be shut down in the U.S. as of June 24.  Prime members could get food delivered through the Amazon Restaurants website or Prime mobile app through the service.

An Amazon spokesperson told GeekWire in a statement, “As of June 24th, we will discontinue the Amazon Restaurants business in the U.S.” The spokesperson reported continued, “Many of the small number of employees affected by this decision have already found new roles at Amazon, and others will be provided personalized support to find a new role within, or outside of, the company.”

 

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