Food Delivery Insights & COVID-19

The food delivery industry has grown 76% per year from 2015-2020, whereby Australians currently spend $2.6b annually. It is not uncommon for many QSR & casual dining restaurants to record 30% – 40% of their total sales in delivery. This was pre Covid-19 and not surprisingly food businesses already geared towards Drive Thru & Delivery out performed other more traditional restaurant skewed brands by a significant margin.

Given much of our work is still very much in the QSR and food industry, we have seen first hand how having a good product, that customers can easily consume and offers hassle free payment methods have done exceptionally well from the crisis impacting other food brands. Brands like McDonald’s, KFC & GYG have weathered the storm extremely well.

Given the delivery expansion, there has become an increasing importance to understand what drives greater delivery sales. Below lists some of Geotech’s general findings across several major players within the food industry.

What You Might Expect

Unsurprisingly, delivery is strongly dependant on both;

  • The Demographic Profile of Nearby Residents

  • The Volume/ Density of Nearby Residents

Inner-city suburbs with strong representations of younger time-poor professionals of high socioeconomics typically hold the strongest potential.

Examples within the Victorian market include;

  • South Melbourne

  • Fitzroy

  • South Yarra

  • Brunswick

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What You Might Not Expect

The characteristics of the restaurant itself (such as store visibility, access & parking availability) each impact delivery potential. All things equal, restaurants that are situated on greater traffic flows with clear pylon & blade signage record greater delivery sales. This is especially so if the restaurant is positioned on a major thoroughfare to & from employment hubs (where consistent brand exposure can be created).

This suggests that consumer choice isn’t entirely determined at home / on the app. The branding & exposure of the store is indirectly acting as an advertisement for delivery. Much like how having a bricks and mortar store present often drives higher online channel sales for fashion, the same principles can broadly be applied to food delivery sales.

The Impact of Cannibalisation

Calculating the net benefit of sales when one (or more) stores cannibalise sales from another is a critical consideration for store sales performance. Just like dropping in a new store too close to another will cannibalise sales for sit down restaurant trade (with destination driven brands experiencing a higher degree of negative sales performance than impulse driven) so to will delivery impact store sales performance. We’ve heard some brands use a standard 3km radius as a means of calculating cannibalisation, (meaning cannibalisation impact is likely higher within the 3 km zone) however we know that this isn’t necessarily the best method because it makes some assumptions. Customers don’t always follow a logical path when making a decision to buy products as per above paragraph. Sales performance, be it sit down restaurants, Drive Thru or Delivery can be impacted by a number of factors so it’s best to follow the general rule of thumb; store branding and signage visibility will play a part in whatever method a consumer may choose to engage with your brand. Sales delivery demand will not necessarily follow a neat circle around the store.

If you would like to know more about our services and how we can help with store network planning, from location analysis to mobile device data tracking to assist your business with a more holistic approach to strategic planning, please contact Jeff Vassel 0421 684 444 or email