Delivering growth

The impact of third-party platform ordering on restaurants

November 2019

Food delivery is growing rapidly across Europe. Existing estimates suggest that the market is experiencing double-digit growth rates and could be worth $25bn by 2023.¹ This study looks at how technology is contributing to that growth and measures the resulting impact on the overall restaurant sector.

Until recently, ordering meals for delivery, even in major urban centers, required calling a restaurant directly, or ordering and collecting in person. New technology has made delivery more convenient for consumers and broadened the range of food available for delivery. First via third-party platforms that allow consumers to place orders with lots of restaurants, presenting their menus and taking orders (often called ‘aggregators’, such as Just Eat, in return for a fee. Then, more recently, third-party platforms that facilitate delivery for restaurants without their own delivery staff have become more prevalent (marketplaces such as Uber Eats, Deliveroo or Glovo). These platforms allow restaurants to provide customers with delivery services by paying a fee to access a marketplace and network of couriers. This report seeks to explore how the rise of those platforms, and in particular the new marketplace apps, has affected the restaurant sector.

It is apparent that:

  • New technology helps restaurants to respond to a significant shift in consumer preferences, with a rising demand for convenience.
  • For many restaurants, it would be wholly impractical to offer delivery without third-party platforms due to higher fixed costs associated with independently fulfilling delivery orders. In a survey by Uber Eats to support this study, the share of restaurants on its platform that offered delivery before joining was only 38% in London and Paris and 36% in Warsaw, with this figure higher at 52% in Madrid. The share that then reported they would have launched such a service if they had not joined was 48% in London, 50% in Paris, 67% in Madrid and 47% in Warsaw. The platforms also connect restaurants to new consumers who might not hear about them otherwise.
  • This will mean largely incremental sales for those restaurants offering delivery for the first time. According to the Uber Eats survey, the share of restaurants on its platform that reported an overall increase in sales after joining was 69% in London, 74% in Paris, and 67% in Warsaw, with this slightly lower at 59% in Madrid.
  • Platforms are enabling a substantial re-shaping of the supply chain, with virtual kitchens (either entirely new facilities, or under-utilized existing restaurant kitchens) and other innovations that match supply to demand and create new opportunities for entrepreneurial restauranteurs. Uber Eats data suggests that operators with virtual restaurants in France and the UK have seen sales increase by more than 50%.

Many restaurants have struggled in recent years and there is naturally a concern that the sector might lose out as the market changes. Given the prominent economic and cultural role of restaurants, any impact on their businesses could have important consequences for urban life and the vitality of local economies. This study attempts to isolate the impact of third-party platforms against the background of other trends affecting the sector (which has always been competitive, with a material failure rate particularly for new businesses).

There is little systematic data estimating restaurant-level impacts, although some restaurants have said that a significant percentage of delivery sales were incremental to their existing business. It is reasonable to expect that restaurants who offer their services through third-party platforms benefit, or they would withdraw their services. What is less clear is the impact on the restaurant sector as a whole, including the extent to which third-party platforms have enabled an overall expansion in the restaurant sector, e.g. replacing meals cooked at home with restaurant meals.

To better assess these overall impacts, a consumer survey was conducted in four key European cities to understand consumer behavior and develop a context-driven counterfactual to understand behavior if third-party platforms did not exist. Engagement with restaurants was also used to inform the revenues and costs associated with different kinds of meals.

Our research identified two common trends across all four cities, based on extrapolating from those survey results:

  • The number of meals sold by across the restaurant sector – both chains and independent restaurants – increased as a result of third-party platforms:
    • London: around 606,000 extra meals each week overall through chain restaurants and 305,000 through independents (around a 4% increase across the board).
    • Paris: around 106,000 extra meals each week through chains (10% increase) and 250,000 extra meals each week through independents (4% increase).
    • Madrid: around 77,000 extra meals each week through chains and 99,000 through independents (around a 1.5% increase across the board).
    • Warsaw: around 48,000 extra meals each week through chains and 75,000 through independents (around a 2% increase across the board).
  • Third-party platforms have driven an increase in revenues and profits across the sector:
    • London: revenue is up around £323m a year, around 1.4%, and profit is up £189m.
    • Paris: revenue is up around €94m a year, around 1.1%, and profit is up €18m.
    • Madrid: revenue is up €23m a year, around 0.3%, and profit is up €36m.2
    • Warsaw: revenue is up 110m zł a year, around 1.0%, and profit is up 46m zł a year.

The results show material variation between markets. Restaurants that sign up for third-party platforms are likely to be better able to benefit from shifts in consumer preferences and demand, while some of those that do not may see lower turnover and profit. This might particularly be the case to the extent restaurants previously offered delivery and operated in a market where few others were able to do so and this was a barrier for competitors that otherwise offered a more attractive proposition to consumers.

The positive result does not mean that third-party platforms cannot do more to improve outcomes in the restaurant sector. Over time, the growth of currently nascent services like virtual kitchens might provide additional dining options for consumers and means of utilizing capacity for restaurants, for example. While this report finds that platforms increase the growth of the restaurant sector, growth in the restaurant sector will also tend to benefit platforms.

This report concludes that third-party platforms should be understood as improving the economic position of the restaurant sector, increasing turnover and to a lesser extent profits, versus a scenario in which such platforms do not exist. This impact will affect how the restaurant sector grows over time, alongside cyclical pressures, consumer tastes and other factors contributing to market trends.


1 Headline figures publicly available from Statista, e.g.
2 The greater increase in aggregate net impacts on profit relative to turnover in Madrid is driven by the relatively lower rate of substitution by meals ordered through third-party platforms for non-restaurant sector meals (see Figure 9). As a result of this, turnover increases from growth in the restaurant sector are more limited and counteracted by the decrease in turnover per meal due to substitution from on-premises dining to collection and delivery meals. Meanwhile, relatively more meals substitute lower-margin direct deliveries for higher-margin third-party deliveries, resulting in an overall larger net increase in total industry profits despite a not as significant net increase in turnover.

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