UK Foodservice Delivery: Insights from Joe Heather, General Manager at Deliverect UK&IE
Staying ahead of the curve is imperative in the ever-evolving and ever-growing food delivery industry:
The UK's food delivery market is forecasted to grow at a CAGR of 8.2% and reach a value of £31.1bn by 2023, as per Statista.
To shed some light on how this evolution impacts the UK foodservice market, we sat down with Joe Heather, General Manager at Deliverect UK&IE, a seasoned professional with a keen eye for industry trends, to get his view on the matter.
We briefly discussed the challenges the industry faces, the emerging trends reshaping the landscape, and the key role of technology in driving these changes.
Q: What's your take on the UK's current food service delivery landscape?
Joe Heather: Well, the current landscape is quite interesting. Order volumes have slowed temporarily due to the economic climate —as reported by the big three DSPs—which aligns well with the economic situation in the UK. The cost of living crisis has been a driving force behind this drop.
The Consumer Prices Index (CPI) rose 6.7% in the 12 months to August 2023, down from 6.8% in July,” according to UK’s Office for National Statistics.
But it's not just consumers feeling the pinch; restaurants face a double hit. While their customer base has shrunk, internal costs have increased, particularly regarding food, utilities, and inflation.
However, despite these challenges, I'm confident that food delivery will make a strong comeback as our economic positioning improves.
Q: What are some trends you're seeing more often in the food service delivery industry, especially regarding technology, operations, and business strategies?
Joe Heather: Certainly, the current state of the industry in the UK is driving the need for operators to adapt to new trends. The industry is witnessing a shift towards revenue diversification, operational optimisation, and customer retention. Some trends worth mentioning are:
Loyalty: Many operators focus on unifying their loyalty programs across all sales channels. The goal is to boost existing customers' frequency and spending while attracting new ones. In a competitive market, retaining customers through loyalty programs is crucial.
Kiosks: With the labor shortage due to factors like Brexit and COVID, kiosks have emerged as a solution. They help reduce staff costs and, interestingly, can increase average spend. When well-executed, kiosk menus and upsell customisation can significantly impact revenue.
Casual Dining to QSR: Casual restaurant groups are shifting towards the Quick Service Restaurant (QSR) model. This change makes these brands more suitable for the on-demand delivery market, which is often incremental revenues for these businesses. We've seen big players making strategic moves in this direction, with Boparan group heavily pushing Slims Chicken, Azzuri acquiring Boojum, TRG acquiring BarBurrito, and Big Table Group launching Super Nonna —A fast-moving pasta concept.
Q: How is technology shaping and supporting these changes, and what should operators keep an eye on in terms of tech advancements?
Joe Heather: Technology is the backbone of these trends, and it's crucial for operators to leverage it effectively:
Loyalty: Technology enables operators to manage and enhance loyalty programs seamlessly; this includes personalised offers, digital reward systems, and user-friendly mobile apps. The ability to collect and analyse data is vital for tailoring these programs to customer preferences.
Kiosks: Technology powers the entire kiosk experience. It streamlines order processing, customisation options, and data analytics for menu optimisation. It isn't just about saving on staff costs; it's also about boosting revenue through efficient sales channels.
Casual Dining to QSR: Technology is vital in streamlining operations, from order management to delivery logistics. Additionally, it's essential for developing user-friendly mobile apps and online ordering platforms. Catering to the growing need for on-demand delivery services will be critical for companies moving to a new business model.
In today's fast-paced industry, technology is the driving force behind success. To stay ahead of the competition, operators must remain tech-savvy and up-to-date with the latest advancements. Don't let your business fall behind - stay ahead of the game with a keen eye on technology to drive growth.
About Joe Heather, Deliverect UK&I, General Manager
Joe Heather is the General Manager of UK&I for Deliverect. Deliverect is a market-leading SaaS solution that simplifies online order management for restaurants globally. He leads a fast-growing team across commercial, technical, and customer support functions, helping thousands of large and small restaurants across the United Kingdom and Ireland thrive.
Joe joined Deliverect in 2022, coming from 12 years of experience with Just Eat Takeaway, where he headed up one of their subsidiaries' businesses. Prior to this, Joe worked for Mondelez International in FMCG, which is also a growth area for the Deliverect business.