Bodean’s founder Andre Blais has told MCA he has ended his relationship with Deliveroo because of concerns over the impact on the dine-in experience and objection to the level of commission.
Instead the eight-strong group is launching a new promotion to drive custom to the restaurants and Blais said he was considering re-launching his own limited delivery service.
He said the combination of business rates hikes – one of his restaurants is seeing its rateable value rise 160% - and the impact of the delivery revolution was “sending us all to hell”. He said he knew of 20 other brands who were considering forming a consortium to tackle delivery commissions.
Bodean’s has been using Deliveroo since the end of 2015, and Blais said in that time he estimated he had paid out £300,000 in fees.
He said: “It became apparent after about three months that there was an impact.
“If we had a £10,000 unit that took on Deliveroo we found we weren’t making any more money but we were spending £5,000 of that through Deliveroo, charged at 25% of gross sales. 25% is a hell of a lot over time and it’s just not sustainable.”
On his decision to drop Deliveroo, he said: “There are two key issues – one is the impact it was having on our restaurants and the focus on the experience. The second is the financial side.
“In the US the model works on 15%-18%, so we does it have to be 25% here.
“So, instead, for a limited time, it is worthwhile to offer 20% discount on the a la carte menu and if people want a takeaway they can come and pick it up.
“I have to regain that trust so it may take me a couple of months but something had to give.
“I don’t think it’s a bad service – and I’m only singling them out because they’re the only one that has true scale at the moment - but I got into this to offer people a full package.”
A Deliveroo spokesman said: “At Deliveroo we strive to be the perfect partner for restaurants who use our service. Our restaurant commission is calculated based on a number of factors and agreed with our restaurant partners. By partnering with Deliveroo, restaurants can leverage their excess kitchen capacity and existing locations to generate revenue increases up to 30%.
“In 2016 Deliveroo created over £200m in additional revenue for restaurants which resulted in over 6,000 new jobs for the industry in the UK alone. We always make sure to tailor our service for our partners from operations to menu selection - we empower our restaurants to have full control over how they engage and work with Deliveroo.”
