Restaurants: Less Profits in the App Era

The growing tendency to order food from home through digital platforms is causing a decrease in business profits, as they must assume the cost of service delivery commissions and sometimes those of additional promotions offered by the applications.

Wednesday, November 6, 2019

Digital applications such as Uber Eats, Hugo App, Go Pato, Glovo and Rappi, which offer in Costa Rica the service of home delivery of food and other items, have gained much popularity among consumers, so restaurants have had to adapt their internal processes to this new trend.

You may be interested in "Restaurants: Trends and Preferences in Guatemala"

These transformations have impacted the logistics, profits and cash flow of restaurants, businesses that increasingly depend on the sales made through this medium.

Gabriel Gutierrez, Sushi To Go's marketing manager, told Nacion.com that "... We went from being a daily liquidity business to an accounts receivable company. In some cases, the amount billed (less commission) is recovered between 10 and 12 days, and in other cases (in the platform that is currently generating more orders) we are liquidated only twice a month."

Gutiérrez added that "... Apart from the fact that the commission is high, a number of additional promotions are implemented internally that are attractive to the user but that the shop must assume, so that the usefulness of the product will always be altered."

According to businessmen, commission percentages range from 20% to 30% of the final price, depending on the company providing the service.

Regarding the types of food most demanded in other Central American markets, Uber Eats managers reported months ago that in the case of Guatemala the most ordered foods are chicken, hamburgers, desserts, Asian food and Mexican.

More and more customers prefer to order at home instead of going to a restaurant, is one of the patterns of consumption that have identified businessmen in the sector.

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More on this topic

Delivery Apps: Proposal to Regulate Commissions

August 2020

In Costa Rica, a bill to give the Ministry of Economy, Industry and Commerce the power to determine the maximum commissions and amounts that may be charged by digital platforms such as UberEats, Glovo, Rappi and Hugo was presented.

This bill arose in a context of booming demand for fast food with home delivery, and a complicated relationship between restaurants and delivery applications.

Restaurants and Delivery Apps: A Difficult Relationship

July 2020

With the boom in demand for food delivery, Costa Rican restaurant owners claim that their companies have given up part of the profits to assume the costs of making alliances with delivery applications.

Since last March, when the first cases of covid-19 were reported in Costa Rica, consumers have been subjected to severe restrictions on mobility, which has led to transformations in the forms of marketing.

Food Delivery: What Do Consumers Demand?

July 2019

Chicken, burgers, desserts, Asian and Mexican food, are some of the most demanded prepared foods under the home delivery modality in Guatemala.

Data from the company Uber Eats, dedicated to home delivery of prepared meals in the country, specify that the "Poke Bowl", containers with marinated raw fish, on a basis of rice or quinoa, along with fresh ingredients such as seaweed, cucumber or avocado, is another of the most purchased dishes by consumers who use the platform.

Collaborative Economy: Business Diversifies

March 2019

With the aim of expanding the market, applications in Guatemala are no longer exclusively dedicated to food delivery, as they propose strategies with supermarkets, clothing stores, pharmacies and shoe stores.

The companies participating in the Guatemalan market agree that there is a great demand for home delivery services, as the complicated transit situation in Guatemala City forces customers to seek alternatives.

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