The New Recipe for Restaurant Survival? Become the Next Domino’s.

For resilience in the future, restaurants are going to need to master takeout and delivery. The problem is those delivery startups like DoorDash, Grubhub, and Skip the Dishes take up to 25% of a restaurant's revenue. Restaurant profit margins are already razor-thin (3%-5% is normal). It's predatory for venture-backed delivery companies to be taking... See more

There’s work involved in making the shift to delivery and takeaway — time and money that a restaurant likely does not have to spend. In the best-case scenario, the model effectively turns restaurants into so-called “ghost kitchens,” eliminating the need for nearly all front-of-house staff. David Chang has called the pivot to delivery “fools gold.”

It would be glib to suggest that most restaurants can survive by simply pivoting to delivery. Indeed, many won’t—and not just because some consumers might be afraid of lukewarm trout. The bigger problem is that the most popular delivery items (appetizers and entrées) tend to be the least profitable, while delivery consumers rarely order the higher-... See more

The most important shift in restaurants in the past decade has been the rise of online ordering and delivery. UberEats, Postmates, Doordash, and a handful of other apps have been knife-fighting (in extremely uneconomical ways) for the privilege of becoming food delivery aggregators. Own enough customer demand, the thinking goes, and not only will r... See more

Is there a sustained move toward delivery and away from in-restaurant dining in that new world? Yes. Not to sound callous, but that’s it. I thought that shift was going to happen over the next 10, 15 years, and no one would have noticed because it would’ve happened gradually. This change is now going to happen instantaneously.

Despite these enormous acquisitions and partnerships, delivery app giants struggle to reach profitability, even while charging feeble restaurants exorbitant fees. From this viewpoint, the food delivery ecosystem is broken. It’s one of the reasons why smaller, more localized delivery services have emerged with a new focus: to help restaurants market... See more

The takeout and delivery business needs to be rethought. I see two new popular paths emerging. They represent diametrically opposing views of this space.