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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