Home delivery shakes up traditional restaurant market

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Updated on 22 June

The restaurant sector is a key sector of the French economy. In 2016, its turnover amounted to 52 billion euros excluding taxes, according to INSEE (1). In recent years, the restaurant service has evolved. Indeed, home delivery has arrived on the market. The delivery has disrupted the process of buying the customer who is now better able to order his dish directly from home without having to move to the restaurant. Home delivery also optimizesthe production of foodservice dishes. As a result, home delivery companies have taken the opportunity, such as the (now well-known) deliveroo and Uber Eats. There is even talk today of an “uberisation of society”. However, it is a new player that is bringing a real digital transformation in the restaurant market. These are virtual restaurants.

Traditional catering tends towards digitalization with home delivery

The development of home delivery in recent years

The restaurant industry is a massive market in the French economy and is also a very important factor of tourist attraction. Indeed, in 2016, foreign customers brought more than 4 million euros to the French economy according to INSEE. At that time, it accounted for almost 10% of the total share of restaurant sales, of which almost 6% came from customers in the European Union and 3% from outside the European Union.

The restaurant sector is divided into three major areas: fast food, traditional food and beverage outlets. These relate to establishments that distribute alcoholic beverages. Each of these areas is impacted by the development of home delivery.

Indeed, the interest of the French population for delivery continues to increase from year to year. Today, 72% of people are interested in home delivery according to LSA (2).

Towards a Uberisation

An uberisation of the company has thus started since the early 2000s. It is about putting in direct contact between professionals and customers, in the economic field, through the use of new technologies, almost immediately. More and more startups are getting into “food tech”.

Food tech covers various types of services. These are companies whose expertise is based on the preparation and assembly of dishes and meals that can then be delivered either by the same company or by an outside player specializing only in home delivery.

Food tech also involves platforms for ordering deliverable food products.

There are also now startups that are starting to make self-made meal kits. This new way of eating appeals to many French people. Indeed, it stimulates the curiosity and the sense of pride of consumers. This combines its practicality with home delivery. Customers then have the opportunity to prepare their own meals by following the steps detailed by the startup. They learn how to cook new dishes that they can share with their loved ones while eating healthily, and effortlessly!

The restaurant market then undergoes a real upheaval following the evolution of the behavior of its consumers.

The new business of the restaurant market: virtual restaurants

The still-unknown concept of ghost restaurants

One of the main players in digitalization in the restaurant market is the virtual restaurant, also called “ghost”.

A ghost restaurant is a gastronomic establishment that has no physical facilities. There are no hardware restaurants. The concept is to be present exclusively on the Internet and on online delivery networks.

In addition to seducing the French, it is a concept suitable for a foreign clientele. Indeed, the latter usually needs to find a fast food option when travelling on French territory.

The bordeaux example par excellence: Dark Kitchen

Among these ghost restaurants, the Dark Kitchen brand has already proven itself in home cooking delivery within the French capital. She decided to take on a new challenge and conquer the clientele of the Bordeaux metropolis.

Dark Kitchen offers an innovative approach by bringing together five diverse restaurant brands: braise Braise, Saint Burger, Big Boy Pizza, Komba Thai and Mama Roll tacos.

Every Dark Kitchen customer is guaranteed to receive dishes of the same quality as a conventional restaurant at home. Indeed, Dark Kitchen has made the right to focus on the culinary know-how of its industry. And so to relegate the logistics and rent of a physical restaurant location in the background.

They then decided to partner with UberEats. This allows them to focus only on the quality of the products (butcher’s meat, chickens of French origin, local products, etc.) and on a taste worthy of the greatest traditional restaurants.

Dark Kitchen is the current proof that the location of the restaurant itself is not the main source of attractiveness to the market clientele. 19th century consumers seem to be more sensitive to quality, convenience and speed. The boom in delivery has only just begun.

A restaurant market in the midst of a rethink

In a fast-moving consumer society, many markets are seeing the behaviour of their target change. New issues are also emerging. Although traditional restaurants are far from being removed from the economic landscape, they are increasingly threatened by ghost restaurants. This phenomenon affects more urban areas than rural areas where the pace of life does not result in this lack of permanent time.

It is clear that digital transformation would affect the restaurant market. However, the evolution of the daily lives of the inhabitants of the major French metropolises seems to be the main cause of the market upheaval. Will we then witness the end of traditional restaurants in the big cities in the years to come, following the unbridled lifestyle imposed by the economic and social pressure of today’s society on the French?

Sources

  1. Restaurants and mobile catering services of the Development of Annual Corporate Statistics (Esane), December 19, 2018: https://www.insee.fr/fr/statistiques/3600814
  2. 72% of e-buyers interested in delivery to LSA’s home from August 31, 2018: https://www.lsa-conso.fr/le-chiffre-du-jour-72-des-e-acheteurs-interesses-par-la-livraison-dans-le-domicile,293981
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