Prepare for Deliveroo disruption, investors warn restaurants

03 May 2016 by
Prepare for Deliveroo disruption, investors warn restaurants

Restaurant operators should prepare for disruption from the new breed of delivery firms and "the rise of the machines", investors have warned.

"Clearly the likes of Deliveroo, Uber and Amazon will disrupt the market; what does that actually mean for operators?," Philip Richardson, Barclays industry director for hospitality and leisure (pictured), asked fellow panelists at The Caterer's casual dining conference.

Ian Edward, non-executive chairman at Brasserie Blanc and investor in numerous food and beverage businesses, said that it was "the one key question for every business I am investing in". Burger businesses, he said, were being particularly disrupted.

"One [large burger business] has done 6% of its turnover from Deliveroo and that is a staggeringly big number," said Edward. "The fact that Deliveroo wants to take 25% is also a staggeringly big number."

Such growth would inevitably lead to other delivery businesses trying to carve out a stake, he said.

However, he said that the issue for operators was "all about the integrity of your product".

Delivery services will struggle to deliver product "in the same state that they picked it up in," he said. However, customers may be willing to accept some product degradation because "frankly, they don't have to move anywhere".

"So I think [delivery disruption] is here to stay and [operators] have to think about how you deal with it, how you package for it and keep the integrity of your product."

Deliveroo appears to have recognised that challenge. The company has started investing in kitchen space for brands in London in areas where it knows it has demand. Yoobi Sushi and Tommi's Burger Joint are two initial customers.

There will be one 'RooBox' kitchens per restaurant (for hygiene and logistics reasons), with no limit on how many brands are on one site.

Foodservice Forum round-up: George Bukhov, Daniele Quattromini, Philip Newman-Hall and more >>

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