Death of DTC Food in 2024?

As someone who only observes the restaurant business as a consumer, these are a few thoughts I have on the state of online ordering.

My suspicion is that bulk pricing for pickup/delivery packaging has increased. Uncertain demand for pickup and delivery has entered a long-term downward trend since 2022. In the past 6-9 months, businesses that have relied on online ordering are seeing a shift towards foot traffic as more employers are squeeze their workforce back into the office (to maximize tax breaks + value of commercial real estate + bonds/pension holders always get paid first).

Across the US, pickup from nearly every restaurant open on a Tuesday wasn't a thing before 2019/2020. I wouldn't be surprised to see more smaller establishments stop pickup and delivery services completely in 2024. Prior to this, there was consolidation in the online delivery arena between 2013 and 2019. Regional players were bought out or left behind as a few whales (like Postmates) grew or were bought out by even larger players (such as Uber).

Uber Eats, Doordash & GrubHub have not done much to increase the bottom line of the small establishments available on their apps. All of these providers have indicated they intend to grow their margins by either 1) putting fees on the businesses, 2) putting fees on the consumers or 3) both. These services were a lifeline for both sides of the equation during the pandemic. However, there is no charity in business.

Delivery + pickup options are ripe with fraud from a business's POV. Once an accurate order is out the door - the services has been rendered for the customer. Consumers aren't guaranteed restaurant quality food, timely delivery of the purchases & quality delivery. This frustration is occurring on both sides of the equation. A restaurant that is forced into a refund on 5% of their orders could be the difference between profitability and going underwater with their local bank.

Unless you're a global chain like McDonalds or Yum Brands, it can be quickly become cost prohibitive to offer these services. In an uncertain economy, in restaurant labor have every right to demand their employees offer more services that increased their tips. The workers at the stores that would usually get tipped on service are missing out on marginal income opportunities when the delivery + pickup orders don't include tip & there are 2-4 less butts in a seat in the building.

The breaking point for online orders is coming in 2024. Drivers for the delivery services are increasingly pushing for higher per stop fees. New York City has already required these workers to make a bottom-line dollar. As larger companies push into same day delivery offerings, I expect to see more of these services promote major players and shift their featured partners away from the mom + pop shops we grew to love during the pandemic.