Expanding the Restaurant Value Chain through Digital Delivery: a Significant Disruptor in the U.S. Restaurant Industry

Mark Traynor, Andrew Moreo, Sorcha O'Neill

Research output: Contribution to journalArticlepeer-review

Abstract

The food industry has experienced enormous growth in the use of food delivery in recent years. More specifically, digitally enabled food delivery has emerged as the most disruptive force in the foodservice industry today. Increased consumer demand for convenience and variety in conjunction with the rapid pace of technological advancements are believed to be the driving factors for the emergence of this phenomenon (Carsten et al., 2016). Foot traffic at traditional dine-in establishments has dwindled as customers opt for online delivery instead, resulting in an altering of the restaurant value chain (Huang, Kohli and Lal, 2019). In particular, the emergence of third-party delivery aggregators (TPDA), such as Grubhub and Uber Eats, present traditional, brick and mortar foodservice operators with a multitude of both opportunities and challenges. Opportunities range from lower financial and logistical barriers for marketplace entrance, to accessing new and more extensive geographical markets, as well as the opportunity for increased sales volumes (Maras, 2019). However, it has been reported that large commission and services fees (5 to 40% on each delivery order) paid to the TPDAs by restaurants are consuming already narrow profit margins (Fisher, 2019). Other reported challenges include operational issues and a lack of consistency of food and service quality (Maras, 2019). On the consumer side, the added convenience of dining at home can come at a premium expense through delivery charges and higher-priced menu items. Therefore, the decision to offer food delivery services
Original languageEnglish
JournalDublin Gastronomy Symposium
DOIs
Publication statusPublished - 12 May 2020
Externally publishedYes

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