This Kelowna restaurateur wants you to know the true cost of meal delivery services - InfoNews

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This Kelowna restaurateur wants you to know the true cost of meal delivery services

The woman who created this group of Kelowna pizza places has lashed out against meal delivery services.
Image Credit: FACEBOOK/Dunnenzies
February 16, 2020 - 12:00 PM

In the old days – just a few years ago – the only way to enjoy most restaurant meals was to visit them in person.

Now, with services like Skip the Dishes, Uber Eats and Door Dash, there are endless opportunities to enjoy offerings from almost any restaurant in the comfort of your own home.

Karyn Mackenzie, for one, wants you to know what impact that lifestyle choice has on small restaurants like her small chain of DunnEnzies Pizza locations in Kelowna.

“Please stop using companies like Skip the dish and Door Dash,” she wrote on Facebook. “They are killing small business all for convenience.”

That was part of her rant that caused such a backlash that she, initially, rejected the idea of an interview with iNFOnews.ca about it.

“To be honest I’d like to hold off for now,” she wrote in a Facebook message. “There’s been a lot of backlash from Skip and some of their drivers.”

But, moments later she changed her mind, messaging back: “Why should I be afraid to have an opinion?”

In her post, she gave a cost breakdown for a $40 order.

The delivery services takes at least 25 per cent off the top, so she gets paid $30. Out of that, she has to pay staff wages and benefits, overhead, food costs, insurance and taxes, leaving her with no profit.

On the other end, the customer pays the delivery company the $40 for the food, $5 for delivery, $5 for a tip and a $5 service fee. So, for the convenience of eating at home, they’re paying $55 and the restaurant earns nothing.

“My issue is with any company who calls themselves a ‘partner’ but knowingly takes the entire profit margin from its partners,’” she wrote to iNFOnews.ca. “The 30-35% taken off the top will cripple most small businesses over time. They will only negotiate that rate with the big national chains again leaving small business at a disadvantage.”

While she noted that businesses have a choice whether to sign up or not, that’s not the reality of the new world order, according to Ian Tostenson, president and CEO of the B.C. Restaurant and Foodservices Association.

“Consumer demand is pushing restaurants to do this and restaurants don’t sort of have a choice,” he said. “They’re either having to forgo the opportunity or get into the opportunity and have to figure out - how do they make it so they can make some margin on it?”

Because consumers are going directly to the Skip the Dishes app, they search the menus of restaurants listed there when making their ordering decisions.

That means if someone is looking for a pizza and DunnEnzies is not on the list, they not only lose the opportunity for that sale but may risk being dropped from consumers’ radars altogether.

The delivery services have exploded in use in just the past six to eight months, Tostenson said, and the industry doesn’t know how to cope with it.

It used to be that free home delivery was offered mostly by pizza or Chinese food outlets. Delivery costs were built into their overall business models. Now, restaurants that never envisioned anything but an eat-in experience, have to find ways to cope with the changes.

It can increase volume but works only if staffing levels don’t have to increase to handle the extra work, Tostenson said. Simply boosting meal prices doesn’t often work in a competitive industry, although some do charge more or only offer certain, higher margin, items for delivery.

Some have created “ghost kitchens.” This is done by restaurants with extra room in their kitchens where they can design a product line with a totally different brand name set up only for the home delivery market.

Others have gone to a “commissary” model where a number of different restaurants will contract with an off-site kitchen that will cook their products just for the home delivery market.

The reality at this time, Tostenson said, is there are no immediate solutions.

But Mackenzie has a suggestion.

“Sure tacos being brought to you while you’re in your underwear by the click of a button sounds great BUT your convenience is causing this community to lose some of our local gems,” Mackenzie said in her blog post. “And don’t even get me started on restaurants who keep signing up with these assholes. Everyone thinks they can’t afford not to, that they’ll be left behind if they don’t sign up, if everyone stood up to them and pulled out they would have no choice but to go away. Companies who make a living purely off the backs of another person's efforts and risks are the worst. Rant over."

This is her full rant.

Let us know your thoughts in the comments below.


To contact a reporter for this story, email Rob Munro or call 250-808-0143 or email the editor. You can also submit photos, videos or news tips to the newsroom and be entered to win a monthly prize draw.

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