How Grubhub and Uber Eats can save restaurants from apocalypse

Restaurant megachains already have a lot on their plate: The industry is too crowded and their menus and supply chains need an overhaul as consumers opt for trendy or healthy ingredients. But they must be careful that dealing with those ongoing challenges doesn’t cause them to miss out on their best hope for long-term growth.

Over the next five to 10 years, nothing will be more decisive than online food delivery in sorting winners and losers in the dining sector. In fact, restaurant chains are at much the same moment that mall-based and big-box chains were in the first decade of the 2000s, when e-commerce had just started to show itself as a massive threat to the traditional retail model.

Just 1.6 percent of all restaurant industry transactions in 2017 were conducted online for delivery, according to a report by Cowen restaurant industry analyst Andrew Charles. The same analysis estimates that online delivery accounted for $19.7 billion in gross merchandise volume, or 3.7 percent, of U.S. restaurant sales in 2017. That’s roughly in line with the proportion of retail sales that had moved online by 2008. And we all know how different the mall landscape is now compared to 10 years ago.

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