App sale

Hard to swallow: the 30% price increase that comes with your meal | Silver

Jhe pandemic has been a boom time for food delivery, as Britons have relied on apps such as Deliveroo to get food delivered to their doorsteps. But that convenience comes at a price, as consumers are often charged higher prices – in some cases almost a third more – on take-out menus as well as service and delivery fees.

Using apps such as Deliveroo, Uber Eats and Just Eat will often cost more than ordering the same food from a restaurant or café, as restaurant owners say they have to offset the fees charged by the apps, which are often around 30% of the order price.

In one case, a takeaway fish and chips in St Andrews charges £11.20 for haddock, chips and lemon if the customer orders from the store, but £14.40 if through Deliveroo.

Wendy Napthine Frame, owner of Cromars, says this is to offset the 29% delivery service charge.

Deepak Shukla, who owns three cafes in south London, charges £3.90 for a cappuccino on Deliveroo and Uber Eats, but £3.10 if a customer walks through the door. A toasted sandwich costs £6.50 on apps and £4.90 in stores. This means that a lunch costs 30% more to order from home.

“We inflate prices to support the fact that Deliveroo takes a commission,” he says. “Otherwise you would make a loss after paying for the staff and the bagging and labeling.”

The use of delivery apps surged during the lockdown as restaurants, pubs and cafes were not allowed to serve diners in person on their premises. In the first half of last year, Deliveroo doubled its customer orders compared to 2020. Just Eat saw similar increases across Europe.

Customers generally pay a delivery charge and a service charge; service charges are a percentage of the order before discounts are applied. Uber Eats charges 10% with a minimum of 99 pence and a maximum of £2.99; Deliveroo’s 5% has a minimum of 99p and a maximum of £2.49; Just Eat’s is 5% off with a minimum of 50p and a maximum of £1.99. Delivery charges are usually based on how far you are from the restaurant.

Rahul Sharma, owner of the Regency Club, an Indian and Kenyan bar and grill in North London, says chicken biryani costs £11.95 if ordered in or taken out. Using Uber Eats, however, that drops to £15.30. It increased the price similarly when using the other platforms. After a delivery charge and service charge – which changes depending on the customer – the total comes to £18.12.

“We pay a 30% commission to the aggregators and they charge the customer a delivery fee and a service fee,” he says. “To compensate for unprecedented cost increases, as well as high aggregator fees, we had to increase the menu prices of our delivery apps by approximately 20% in order to survive; otherwise, being listed on an aggregator’s platform is just a costly marketing exercise.

David Fox, co-founder of the Tampopo restaurant chain, which has five locations in London and Manchester, says they are raising prices by up to a pound on their main courses on their Deliveroo menu.

Wendy Napthine Frame, owner of Cromars fish and chips, had to raise prices to offset the 29% delivery service charge

“Restaurants and takeaways must pay between 25% and 40% of takeout sales through delivery platforms,” he says. “If takeout is a big part of a street business’s total sales, then that’s a problem.”

But Peter Backman, a restaurant consultant, says not all restaurants charge extra, especially large chains where the price of dishes is well known to the consumer.

Although customers won’t have to pay the higher prices, many are willing to do so, he says, especially since the shutdowns. “Delivery really took off because it was the only way to have a cooked meal that you hadn’t prepared yourself. And the ‘premiumization’ [paying more than you would have paid in the store] also increased,” says Backman.

“There’s a whole class of customers for whom the convenience of just picking up the phone and having a hot meal delivered within half an hour, or whatever, is a huge benefit. And they are ready to pay.

The commission rates charged by Deliveroo vary depending on the type of service used by the restaurant or takeaway service, for example whether it has its own couriers or whether it uses the company’s.

Restaurants that simply use Deliveroo, instead of multiple services, often get better rates. “We encourage restaurants to set the same menu prices as they offer customers when dining in,” Deliveroo says. “Partnering with Deliveroo means restaurants don’t need to provide delivery services, fund marketing campaigns or customer services themselves – we strongly believe our commission rates are competitive for service. provided.”

Just Eat typically charges a restaurant 14% if consumers pick up their own order or if it is delivered by restaurant couriers.

Two Deliveroo bike couriers parade with their large turquoise delivery backpacks
Deliveroo doubled its customer orders during the pandemic when people couldn’t go out to eat. Photography: BMD Images/Alamy

Restaurants that use Just Eat’s delivery network pay an average of 30%. He says, “Just Eat only succeeds if our partner restaurants succeed. Our commission rates remain competitive and despite rising external costs, our market restaurant prices have not changed in the last five years in the UK.

Uber Eats says, “Commissions cover a wide range of essential restaurant services, from processing payments to handling couriers to providing dedicated customer support.

Consumers who want to order directly from their local restaurant can find a list with links on the StraightFrom.com site, operated by Flipdish, a technology company that brings restaurant ordering systems online.

The Friday fish and chip price spike

The price of a Friday night fish dinner has gone up and is expected to rise further as the costs of supplies, from fish to mayonnaise to packaging, rise.

The Chippies are under increased pressure as the war in Ukraine, the cost of living crisis and soaring energy costs combine.

Wendy Napthine Frame, owner of Cromars Fish and Chips in St Andrews, says she has raised prices by 10% and may be forced to raise them further in the near future.

“Oil has doubled over the past few months. This is the biggest increase in our core ingredients. The mayonnaise we use for our tartar sauce has increased. Our own dough mix has also increased due to the cost of flour,” she says.

The war in Ukraine has created uncertainty over the supply of cod and haddock from the sea north to Norway and Russia.

Mark Polley of Northern Irish chip shop chain John Dory’s says the price of fish has risen by 90%. “Of the whitefish landed in the UK, 45% came from Russia and this is what supplies the chip shops. It is therefore not available. [The high] The price of oil is also due to the shortage because a lot of sunflower oil comes from Ukraine. This also puts pressure on rapeseed oil, which had a very poor harvest this year.