Delivery grows as app orders race ahead

Updated: Apr 26, 2019

Delivery is the foodservice industry’s fastest-growing channel with orders up 39% between 2015 and 2018, according to NPD Group.

In contrast, total visit figures for the British out-of-home market grew just 2% between 2015 and 2018, peaking at 11.35 billion visits in 2017 and declining by -0.5% in 2018.

Delivery spend increased by £1.35bn in 2018 compared to 2015 and NPD says the British foodservice delivery market could be worth £6.3bn by 2021.

Delivery of breakfast is up by 86% and lunch by 99% since 2015, while snacking delivery visits are also growing rapidly, indicating the increasing appeal of delivery across the day.

Around 7 in 10 delivery visits are to residential addresses while 1 in 10 are to work locations. And it’s not just young consumers that like food and beverages coming to their door; delivery visits grew strongly among the 35+ age group between 2015 and 2018, with visits up 45%, or an additional 63 million.

Dominic Allport, insights director (foodservice), The NPD Group, said: “In the past decade, foodservice delivery spend has almost doubled and is especially profitable for restaurants looking to increase business volume. Over the short-term, commission charged by aggregator platforms could impact operator profitability. But the long-term trend for food delivery is growth. The arrival of virtual restaurants, usually run from ‘dark kitchens’ and offering delivery-only brands, will strengthen the wider movement away from retail-based foodservice.”

Delivery orders made by phone are declining in favour of apps. Phones accounted for 56% of all delivery ‘visits’ in 2015 but this had shrunk to 45% by 2018.

App orders are racing ahead and are up 182% since 2015 and accounted for 21% of total delivery visits in 2018. Within the 16-to-24 age group, app delivery visits now account for 30% of total delivery, highlighting the increasing importance of technology in younger peoples’ lives.

The NPD Group has warned operators that further growth is reliant on getting the formula right in terms of quality, price, freshness and speed-to-customer, while also meeting the public’s concern about excessive packaging associated with delivered food.

Better packaging and on-time delivery is especially important for hot foods that are not easily reheated.

The NPD Group also predicts drones will be a feature of the delivery channel in Britain within five years, with branded drones offering a new marketing opportunity and increasing customer loyalty. Drones are also likely to be more sustainable than some other forms of transport and could work just as well in rural locations as cities.

NPD’s Dominic Allport adds: “There’s much more innovation to come from the delivery channel. Consumers will love the novelty value of receiving their food order via drones. As soon as British foodservice operators get a viable and authorized drone delivery platform, they’ll offer it to the public for appropriate foods in selected markets.”