Have Delivery Fees Taken a Bite Out of Restaurant Industry Sales?

Jan 30, 2023 | Finconomics 101, No Bull Economics

Delivery Fees Post Banner

Delivery fees are not cheap & can represent multiples of the menu item price. Although there is an argument to be made that delivery marketplaces can expand a restaurant’s marketing reach, there is a price to be paid in terms of industry sales cannibalization

Key Points

With DoorDash’s marketplace sales (which include menu mark-ups, delivery fees & tips) apparently settling in at a ~6% mix of total restaurant industry sales after the covid growth spike, restaurant operators should consider how much delivery fees may be cannibalizing their business.

As an example, an order for a SuperSonic Double burger ($5.99 on the website) costs $15.31 for delivery. This delivery customer transfers $9 in discretionary purchasing power from the $15 order to DoorDash (60%) which could have been spent on incremental drive-thru menu orders. To put this in perspective, 60% of DoorDash’s global $42B marketplace sales ($25B) during 2021 may have come back in part to restaurant operators. That’s a big number representing roughly 2x Taco Bell’s domestic system sales!   


Doordash Market Share Graph
Doordash Market Share Graph
Restaurant Research

Email Sign-up

15 Second Posts

What is Fixed-Income Issuance Dominated by?

Total U.S. fixed income (FI) issuance declined -34% y/y to $8.8 trillion during 2022 as interest rates ramped up.

Bank Deposits Growing Much Faster than Business Loan Demand

Banks have been parking excess deposits in various forms of government debt that are subject to interest rate risk & in risky crypto bets. This is causing systematic risk.

Nerdwallet Survey Shows an Indebted & Very Stressed Consumer

Consumers are combating the higher price of living & higher interest rates by driving less, buying store brands & taking on more debt.

The United States of America is Worth Saving

Americans need to be reminded about our heritage as the single most productive nation as measured by GDP/person with a unique capability to bless the entire world if we can simply get back to business.

Should Private Banks Go Extinct?

Since the 2008 Great Recession, 134 banks with assets of $1.25 Trillion have been closed by regulators. At the same time, the Fed’s ballooning balance sheet now amounts to nearly 50% of total domestic bank deposits.

What Happened to Silicon Valley Bank?

Don’t assume that SVB’s difficulties are symbolic of the entire banking industry.

What Does the End of the Petrodollar Mean?

The Saudi minister of finance announced that the Kingdom was ending the petrodollar. “There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal”. Yikes!

Senator Kennedy Schools Country on Economics 101

We have a choice of how to tame inflation, cut government spending, or throw people out of work.

Inflation is Marginalizing Purchasing Power from the Lower-Income Demo

As households with annual incomes >$70k drive 62% of total food-away-from-home sales, it is more important than ever to focus on this demo especially as spending from the lower-income demo slows.

A Look at Consumer Expenditures by Category

You can learn a lot about someone by how they spend their money…

Digital Marketing Opportunities
Restaurant Research

A Restaurant Research LLC Company