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Third-party delivery is a “double-edged sword”

The soaring popularity of delivery is helping many restaurants to grow their sales, but it might be compromising consumers’ perception of their brands, according to the 2019 Business Leaders’ Survey from CGA and CPL Online.

The poll of over 175 industry bosses reveals that half (52%) of businesses now offer a third party delivery service, with three quarters (73%) saying it has a positive impact on sales, compared to just 4% who think it has a negative impact. This, analysts say, is a clear sign that operators think that delivery is enhancing restaurants’ sales rather than cannibalizing them.

However, despite delivery boosting sales, fewer bosses (33%) believe it is benefitting loyalty and 8% go as far as to say it is harming return business.

The Business Leaders’ Survey also highlights the risk that delivery can damage the reputation of a brand, especially if it is executed badly. Only one in five leaders (19%) says delivery has a positive impact on consumers’ brand perception—lower than those who think it has a negative (20%) or neutral (61%) impact.

Take-up of delivery is set to continue growing this year. More than four in five leaders (83%) think consumers’ frequency of ordering through third party delivery platforms will increase. In contrast, only one in ten (10%) thinks the frequency of visits to their restaurants, pubs or bars will increase.

CGA director Karl Chessell said: “The rise of third-party delivery platforms like Deliveroo and Uber Eats is having a seismic impact on many restaurants’ business models. But our survey makes clear that it is a double-edged sword. Operators are having to weigh up the positive short-term impact on sales with the danger of compromising their brand and reducing restaurant footfall in the long run. Leaders will be watching delivery sales patterns with great care in 2019, and it will be fascinating to see where this crucial trend goes next.”

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