Skip to main content

Edition 395 – Unprofitable Ignorance

My wife and I headed out for dinner one Saturday evening recently. We’ve been trying a different place and the food is pretty good, even if the lack of soft furnishings inside the restaurant mean its louder than it should otherwise be.

After a long week of meetings, and a day in the garden to catch up on the greenery that was quickly racing away as Spring takes hold, we were looking forward to a simple meal and some time together.
We rolled up at 6pm and there was one other couple in this 30 seat restaurant. They were mid-way through their meal and their young baby in tow was impeccably well behaved whilst Mum and Dad took some time to step out and enjoy someone else preparing dinner.
There was a constant flow of traffic in and out of the restaurant. A few more patrons turned up to occupy some of the tables. Some arrived to collect takeaway. And, of course, there were the ever present Uber Eats and Menulog delivery drivers, through the front door.
Entrée arrived after almost half an hour. Somewhat slow, but it gave us a chance to share a glass of wine and talk about our travel plans for 2024. The food didn’t disappoint. However, I couldn’t help overhearing the grumblings from some of the patrons – people hanging around for their takeaway, others waiting for their orders to be taken, or the food to be delivered to their table.  But not the Uber East and Menulog drivers – they were in and out, pretty regularly.
And so it continued, until after almost 90 minutes, I whipped out my wallet, headed up to the counter, told them to cancel our dinner order and that we’re off elsewhere.
This is not the first time I’ve been in a café or restaurant where the large corporate online delivery platforms are dictating to small and family business owners, how to run their business. Yet, what never ceases to amaze me is that these owner operators continue to pray at the altar of online, all to the detriment of their on-site patrons. I’ve been in other establishments where, in the end, people’s frustrations at receiving slow or poor service on-site is enough for them to up and go, and never return.

It’s my understanding that if you’re a café or restaurant that signs up for these online platforms, your revenue take is about two-thirds of what it is for on-site patrons. Further, there are performance standards that must be adhered to in terms of response time – the longer you take to prepare the order, the lower your rankings, thus impacting your ability to generate future revenue from the online platform.

No doubt, instant feedback is provided to the business owner about response times and performance standards, from the online platform. My guess is that “counselling” is afforded to the café or restaurant on how they can improve the “customer experience” for those sitting at home, on their couch, waiting for their food to arrive.

Ironically, it appears these same business owners are not taking note of the disenchanted on-site patrons that persevere for only so long, and then never, ever return. Remember, these are the same people that are paying up to 50% more than their online counterparts, for the same meal.

You might think today’s missive is about eating out, but it’s not. It’s about three things:

  1. The unwillingness of most business owners to take a detailed look at the numbers in the business, daily. Total revenue is not, and never should be, the only metric you’re looking at.
  2. The rush, by business owners, to be a part of an online world, where you end up sacrificing not only revenue, but a significant portion of your profit, to be a part of it.
  3. The impact that a large corporate, with their algorithms and online portals, can have on the success of small and family businesses, if you let it!

This Week’s Tip

“Is the only one making a decent living out of online hospitality, the large corporate that have developed the platform?”