Restaurants are increasingly shifting their delivery strategies, moving away from third-party services like Bolt and Uber, and opting for in-house delivery services. This change aims to eliminate intermediaries and establish a direct connection with customers. By doing so, restaurants gain access to valuable customer data, essential for making informed investment decisions for third-party platforms.
This strategic shift comes as online ordering gains traction, a trend accelerated by the Covid-19 pandemic. The pandemic drastically transformed global eating habits, propelling the food delivery market to an estimated $150 billion in 2021, according to a report by McKinsey.
To enhance their sales and preserve their narrow profit margins, restaurants are now competing with delivery service providers for customer data. By doing so, they aim to reduce the commissions paid to third parties, ultimately increasing their revenue. Simbisa Brands Limited, the parent company of popular fast-food chains like Chicken Inn, Pizza Inn, and others, has reported a decline in deliveries through third-party aggregators since transitioning Pizza Inn’s delivery exclusively to in-house platforms in Kenya. This move entailed severing ties with third-party merchants such as Uber Eats, Bolt, Jumia Foods, and Glovo.
While specific numbers from third-party aggregators remain undisclosed, most restaurants have embraced in-house deliveries. Some establishments in Nairobi have initiated their delivery services to phase out drivers or avoid outsourcing to third-party providers like Uber Eats, Jumia, or Bolt. These third-party services charge fees that eat into restaurants’ already slim profit margins.
The decision to bypass third-party merchants in Pizza Inn deliveries has led to an overall 18% decrease in deliveries in the market year on year. Simbisa Brands, a company listed on the Victoria Falls Stock Exchange and a wholly owned subsidiary of the Zimbabwe Stock Exchange, attributed its revenue losses to factors such as increased taxes and the high cost of living, which have strained consumer spending. This shift in the restaurant industry underscores the importance of adapting to changing consumer behaviors and exploring cost-effective methods to sustain businesses in an evolving market landscape.
