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Big companies, small companies, private companies, delivery companies, reservations companies, and a li'l fast food thrown in for good measure
Welcome to Expedite, a (mostly) weekly newsletter by Kristen Hawley covering what’s important in restaurant technology.
A recent piece in Fast Company is the latest to spotlight smaller, local delivery companies and their work to “fight the tyranny” of big delivery companies. (Their words, not mine.) Indeed, it’s important to give attention where it’s due; smaller, regional, or cuisine-focused services are good business right now (think: Slice for pizza delivery, or ChowBus, which specializes in Asian food). As I’ve said a couple times, I believe much of the future of food delivery from independent restaurants is local, just like their business.
I think the best way to think about the smaller delivery companies is to look at how they’re changing the big ones, not pitting them against each other in some sort of delivery war thunderdome where the winner takes all.
We’ve seen this play out in restaurant technology before: When Resy launched onto the scene (after iterating a few times) it offered restaurants reservations and table management software with a price point and a model to rival OpenTable. It gave restaurateurs options, even though its network is comparably small. OpenTable has close to 60,000 restaurants worldwide to Resy’s 4,000. Still, the features, the pricing plan, and even the design Resy offered made it attractive to a certain type of restaurant, with an especially strong showing in the new and notable restaurants of its hometown of New York City. Its features undoubtedly influenced the incumbent, things like reservation alerts for hot tables and a new pricing structure for restaurants.
I love to watch the innovation and execution happening on a smaller scale at smaller companies — it’s certainly more exciting than decisions that come from a corporate boardroom, aimed to make investors happy.
Grubhub’s Best. Year. Ever.
Speaking of boardrooms, Grubhub released its second quarter earnings last week, the first quarter of results since announcing an impending acquisition by Just Eat Takeaway.
The big takeaway: Grubhub’s numbers confirm that the pandemic has changed the way we purchase and eat restaurant food, likely for a very long time. “Given the strength we continue to see in the third quarter, we now believe the pandemic has been less of a temporary demand spike and more of a permanent catalyst putting our business on a higher, sustained trajectory,” the company’s executives wrote in a letter to shareholders.
Grubhub’s numbers are up, up, up. Both gross food sales (that’s the total amount spent on food ordered via Grubhub’s channels) and Daily Average Grubs ( I’m going to miss this metric that describes the number of Grubhub orders so much) have continued to increase. In smaller and newer markets, the kind targeted by expansion efforts and aided by big enterprise deals, gross food sales are up as much as 150 percent from the same period last year. More restaurants signed up to be Grubhub partners in the first half of this year than in all of 2019. 2020 will almost certainly be Grubhub’s best year ever.
The company skipped its traditional conference call, and informed shareholders and analysts via a letter that it would no longer hold quarterly calls ahead of the acquisition’s close, expected in 2021. A note at the end of the letter confirms that antitrust regulators in the U.K. and the U.S. have greenlit the Just Eat/Grubhub merger.
So now what? Grubhub will continue to report quarterly earnings ahead of the merger, switching over to Just Eat’s reporting formula after the deal closes. Just Eat takeaway currently does break out regional numbers in its reports; this should continue, giving us a continued look at Grubhub’s U.S. operations. But an acquisition by a larger company probably means a little less visibility into the inner workings of the machine, and it may be even harder to compare business across competitive services. Plus, as one analyst told me: “You will also get some currency translation issues where the revenue is reported in pounds but earned in the U.S. in dollars.”
OpenTable’s Takeout Option
Long before the pandemic, OpenTable added delivery options to its app in partnership with a handful of large delivery companies. At the time, it felt like a testament to the way we think about restaurants and the way we enjoy them — a dining-in occasion and a dining-out occasion may be fundamentally different things, but the same restaurant can easily fullfil both. Now there’s the next step in its continued evolution, this time almost certainly spurred by the pandemic: takeout, which diners can order through the OpenTable app.
After conducting its own survey of about 10,000 diners, OpenTable noted a 72 percent increase in the portion of diners ordering takeout once a week or more in April. (So it follows that more restaurants that didn’t offer takeout previously — at least not with the same vigor — would seize the opportunity.) Restaurants that offer takeout via the OpenTable platform pay only credit card fees through the end of 2020; after that they’ll pay a 2 percent flat fee per order plus fees. This is comparable to competitor Tock’s model, which launched its own to-go service with impressive speed a few weeks into mandated dining room closures.
Like Tock, OpenTable is teeing this up to be a permanent part of its offering; another step in the evolution of reservations and table management services’ adjustment to life outside the dining room. (ICYMI, Here’s what that looked like back in April.) It also lets OpenTable work with restaurants that may not have needed or wanted the digital reservations the service is known for. When I spoke to Tock CEO Nick Kokonas in mid-April about his company’s new to-go feature, he told me that over 400 restaurants were using Tock for takeout with another 650 in “some stage of onboarding.”
What else is happening?
The newly formed Independent Restaurant Coalition has an impressive new TV ad. The group sprung up immediately after mandated closures and is working to help pass a huge (and needed) restaurant-specific relief measure through Congress. Two surprises from the ad: One, it’s narrated in dramatic fashion by Morgan Freeman. And, two: it’s supported by DoorDash.
A giant ($580 million) Amazon investment into the U.K.’s Deliveroo delivery service has finally been approved by regulators. This gives Amazon a 16 percent stake in the company.
TouchBistro acquired TableUp, a Boston-based guest retention and marketing platform. Terms of the deal were not disclosed. TouchBistro is a point of sale system, TableUp provides marketing, loyalty, online ordering, and front-of-house operations. More consolidation in the restaurant software space!
I’ve been wanting to write this one for a while: Today on Eater, here’s how chain restaurant mask policies are a bigger signal to the American public about how to live safely through a pandemic than guidance from our elected leadership.
And, more chain news: the pandemic has basically fast-forwarded fast food and chain restaurant operations, catapulting them into a new reliance on digital order-ahead and drive-thru traffic.