Most of the growth in third-party delivery over the past year has come from just two companies: DoorDash and Uber Eats. They’ve joined market leader Grubhub to form what appears to be a “big three” in the delivery and online ordering business—though a fourth company, Postmates, is also growing.

If such trends continue, the result could have major implications for restaurant companies and especially smaller chains that might be forced to accept less favorable deals just to get in front of the providers’ customers.

…Restaurant companies are giving delivery providers a lot of power—essentially handing the relationship with their customer over to an intermediary that might not have the chains’ best interests in mind. “No other vendor has that kind of power,” Mazing said. “Sysco can’t take the relationship. The payment processor can’t. So this is a new threat.”

To be sure, the delivery business is still quite early in its history. At just under $10 billion, the five largest providers wouldn’t even be a top-five restaurant chain, based on Technomic’s Top 500 Chain Restaurant Report.

…As such, the market is setting up to give major advantages to large chains that can negotiate better rates with these companies, leaving smaller companies with lower profits—or forcing them to merge with other smaller restaurant chains in a bid to improve their own negotiating leverage.


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