5 Steps to Turn Your Restaurant into an Advanced Distribution Centre

This article first appeared on LinkedIn.

A couple of our clients are Food & Beverage, so we’re always on the lookout for quality sites that are fit for purpose. Increasingly, third party food delivery services are a consideration for restaurateurs, and how their site space is laid out and managed. Recent research shows that Australians are spending $2.6 billion each year on food and drink delivery through companies such as Menulog, UberEats, Deliveroo and Foodora.  The survey found about one-third of adults living in capital cities are food delivery users, and spend an average of $1600 a year.  

The online food delivery services market is now worth 12 per cent of sales of the lucrative $44.1 billion cafe, restaurant and takeaway food services industry. Takeaway sales as a whole have also grown by 18 per cent in just three years, according to the Australian Bureau of Statistics. It’s safe to say it’s a huge trend and it isn’t going anywhere.

Saying all this, it’s clear that food delivery platforms aren’t for everyone, and that there are a range of alternatives. Hospitality expert Wendy Hargreaves of FiveOfTheBest.com offers some astute observations from her experiences with restaurateurs entering the third party delivery game. But the bottom line is that having a read and evaluating what’s best for your business – placing considerations into cost structures, strategic location, and alternative delivery options – is key to outcomes.

If you do decide to go the third party delivery route, there are some key factors you ought to consider to ensure the effective balancing of an online order stream with your in-restaurant dining experience.

1. Your restaurant customers are still of the utmost importance

Third party delivery services provide huge opportunities for small businesses but that shouldn’t come at the expense of your in-restaurant dining experience.

Moreover, when you take out the 30% commission that some delivery platforms charge, the ability to sell alcohol and maybe upsell some dessert – you can see how when presented with an online customer vs. someone in-store, the latter may be more valuable.

To the best of your ability make sure the delivery orders don’t hinder their experience. Keep yelling order numbers to a minimum, ask riders to remove their helmets, and don’t ignore customers because of app-demands.

2. Be kind to your drivers

You need drivers to accept your orders for the system to work and they need to make money. If something is taking a little longer than expected and they are becoming wary, don’t get upset with them. Instead, offer them some water, let them use the bathroom, and

feel good that you have done the right thing.

It’s also important for your in-house customers to see you treat drivers professionally.

3. Try having an alternative entrance

We’re looking for sites that allow an optimal dining experience in the front and a reasonable distribution out the back for our clients.  The delivery trend isn’t going anywhere so set yourself up for success in the hospitality industry by looking for a place that can meet your needs. Successful restaurateur Troy McDonagh put this into practice with “store design to ensure we have

fully integrated delivery and take-away [systems in place] without diminishing the dining experience”.

4. Diversify

Many people are now running ‘virtual restaurants’: takeaway shops that operate out of a kitchen, and purely service online customers. There are over 150 of these virtual restaurants on Uber Eats in Australia. The key insight that has enabled these restaurants to emerge is data from delivery apps like Deliveroo that has identified customer demand in underserved areas to reduce risk for restaurants.

Look online and see what isn’t available in your area – it may present opportunities.

Consider diversifying your product range to reflect what online orderers are demanding – if you run a pasta place but reckon you can make a mean burger, and there’s a market for it, why not give it a go? The apps can provide opportunities to expand your offering and acquire new customers.

5. Negotiate

If you’ve completed the first four steps, it’s not impossible that a large portion of your business is now a well-oiled machine delivering boxed-up versions of your favourite foods to neighborhood couches everywhere. But if your restaurant is thriving, and in-house customers don’t feel like they have to sit in the middle of the running of the bulls just to get dinner,

it’s still important to manage & optimise your delivery service arrangement.

If you’ve been signed up to a number of delivery services for a couple of years, review your setup. As a professional negotiator I know the power of leverage, and I can tell you you’ve got it! The margins delivery services charge small businesses are huge and eat into a large portion of the profits, and it’s completely within your rights to call a representative and ask for a reduction in fees. Especially if you have multiple locations – large publicly listed companies certainly aren’t paying the full rate…


Philip Reichelt is the Director of Tenant Leasing Group. With over 20 years of experience in the Australian property market, Phil specialises in advising & representing retail, commercial & industrial tenants, and managing transactions from end-end. A credible industry commentator, Phil loves handling lease-work for established institutions as well as ambitious brands breaking ground in new markets.

Connect with Phil on LinkedIn.

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