Food Delivery Shakes Up The Way Restaurants Operate
How often do you order food and have it delivered versus going to a sit-down restaurant? Across the United States, food delivery is the fastest-growing segment in the restaurant industry — and it’s left some business owners struggling with how to deal with the changes. In Milwaukee, Cousins Subs has its own answer: a delivery-only facility.
The Cousins Subs location in Walker's Point near National Avenue and 1st Street is unlike any other. There's no storefront with a large menu attached to a wall or an assortment of meats, cheese, and bread on display. There's also no one waiting to take your order. In fact, customers aren't allowed here, it’s for delivery only.
"About 85% of our deliveries are business related, 15% residential and more of our business during the day than during the evening," Alan Lundeen says. He's senior director of operations and talent for Cousins Subs.
I visited the delivery-only location around 4 p.m. on a weekday, and Lundeen showed me around the kitchen. He says most of the business is done during the lunch hour rush. Lundeen wouldn’t say exactly how many orders the delivery-only facility gets right now, but he's open about the goal.
"We're striving for 500 deliveries a week. We have a ways to go, but that is our ultimate goal. We have seen week-over-week performance improvement," Lundeen says.
Lundeen acknowledges that since the facility opened over the summer, the learning curve for staff has been steep.
"We were novices at this. ... Right now, we have a big map in the kitchen and self-taught lessons on where streets are," Lundeen says. "Understanding of how to coordinate orders, how to package them together, how long to wait before a driver gets another was really, really helpful."
Over the last 10 years, the off-premises market, meaning food trucks, carryout and delivery make up more than 60% of restaurant traffic, according to Hudson Riehle. He’s senior vice president of research with the National Restaurant Association.
Riehle says while delivery only makes up about 3% of that off-premises category, it is the fastest-growing.
“It remains an extremely consumer-driven industry and it’s quite clear that over the next decade more and more meal solutions will be provided via that delivery channel,” Riehle says.
For some businesses, that means contracting with a third-party delivery company such as Door Dash, Grub Hub or Uber Eats. But fees those companies charge can be expensive for customers, sometimes totaling up to 30% of the cost of the meal.
Eric Brey chairs the school of hospitality and leadership at UW-Stout. He says for restaurants that choose to deliver themselves, one thing must be true.
“If you’re going to be a delivery-only restaurant, you have to have a lot of product going out that door so that those razor-thin margins add up. It’s almost like any other big discount store. The way those big discount stores operate is they have to move a lot of product all day every day just to make that profit to stay open,” Brey says.
Back at the delivery-only facility for Cousins Subs in Walker's Point, the company’s Alan Lundeen says it remains to be seen whether Cousins will open more spaces modeled after this one.
“We’re hopeful. I mean as we grow throughout the Midwest and we’re able to work with a developer in a larger city, we would hope that maybe part of that deal would include a facility like this,” Lundeen says.
For now though, a second delivery-only restaurant is coming to the Milwaukee area this week. But it’s not another Cousins facility. Lou Malnati’s, a Chicago-based pizza delivery joint, is opening in Fox Point.