New data from app creator AppInstitute shows takeaways have saved more than £181,500 on delivery service commissions and charges since lockdown began.
While online and mobile food orders have proved a lifeline for takeaways and restaurants during the COVID-19 pandemic, many pay large commissions to companies such as Deliveroo and Uber Eats, which charge around 30% per order. This can mean takeaways give up around £6.65 on an average order of £22.15.
AppInstitute, which enables takeaways to quickly create their own mobile app for direct orders using its App Builder, has helped takeaways deliver more than £726,000 in orders since lockdown began on 23rd March. This has saved businesses more than £181,500 if they’d sold the equivalent orders via the likes of Deliveroo and Uber Eats.
During lockdown, takeaways using App Builder have seen the value of their average orders increase from £17.69 to £22.15.
Ian Naylor, the CEO at AppInstitute, explains: “Even before the lockdown, takeaway owners already operated in a tough environment. Margins are tight and making a decent profit is made harder by the likes of Uber Eats and Deliveroo hoovering up market share and demanding eye-watering commission fees. Lockdown has seen many takeaways look at their options and to find alternatives to giving away around a third of their takings to middle-men.
“They realise they don’t need to invest thousands of pounds in technology that enables them to sell direct to consumers. App Builder means they can create their own sales app in hours and pay less than £50 per month in charges. Even when they factor in the costs of hiring their own delivery drivers, they’re still keeping much more of the revenue they’re making.”
Kulbir Singh, owner of the Sea King Fish Bar in Derby, used the App Builder to launch an app in the first week of lockdown. He explains how it helped maintain trade at a difficult time: “Customers were staying at home and we needed a way to keep orders flowing, but were reluctant to use the online platforms because of the large commissions and lack of control.
“AppInstitute helped us build an app in under 48 hours and it’s been a lifeline for many customers, especially those in the shielding category who can’t leave their house. I’d estimate around 25% of our total orders since lockdown have been via the app.”
AppInstitute has seen a three-fold increase in the number of takeaways using its platform since lockdown began, with the number of fish and chip shop subscribers growing rapidly.
Naylor concludes: “We’ve spoken to literally hundreds of takeaway owners during the lockdown, and they’re excited about the opportunity to build a community around an app.
“Takeaways have traditionally used large online platforms because it seems like the most straight-forward approach to evolve from the old system of telephone orders or to get selling digitally. There’s a growing realisation that this isn’t the only choice and we’ll increasingly see a trend of more takeaways selling direct to their loyal customers.”
*£726,000 in orders
Average commission: 30%
Gross saving: £217,800 (£726,000 @ 30%)
Average delivery cost as percentage of order: 5%
Delivery cost total: £36,300 (£726,000 @ 5%)
Net Saving: £181,500 (£217,800 – £36,300)