Ikea Tests Food Delivery
Meanwhile, some chains are seeking lower delivery fees from third-party vendors.
Jul 05, 2019
PARIS—Ikea might be known for its DYI furniture, but there’s another reason shoppers stop by a retail location: meatballs, herring and cinnamon rolls from its cafeteria. Ikea is even testing home delivery of its foodservice items in Paris, Fast Company reports.
The delivery trial focuses on its Swedish menu of salmon, beets, cabbage and salads, which are shipped out of a central warehouse. Ikea said it would consider expanding the service to Spain and other European countries if the pilot proves successful.
Meanwhile, U.S. restaurants are negotiating with third-party delivery companies to reduce fees, the Wall Street Journal reports. McDonald’s and Applebee’s are among the companies seeking lower rates from GrubHub, DoorDash and Postmates. The restaurants want to pay less in commissions to the delivery companies, as well as have the third-party vendors shell out more on promos and marketing.
“The economic model is not sustainable in the way it has been structured,” said John Cywinski, president of Applebee’s. U.S. food delivery sales topped $34 billion in 2018, up 13% from 2017, according to Euromonitor. But those sales aren’t going directly to restaurants, as delivery companies take around a quarter of a typical order.
That’s why some restaurant chains aren’t jumping on the delivery bandwagon or are handling delivery in-house. Texas Roadhouse wants to “make sure our experience when people do come in and get to-go is the best that it can be,” said CEO Kent Taylor in Nation’s Restaurant News.
Jimmy John’s, Domino’s and Panera Bread will continue to run delivery personally. “It’s not clear why I would want to give up the franchisee’s margin or data in the business and give it to someone who would ultimately use it against our business,” said Ritch Allison, CEO of Domino’s.
Merchandising Vendor relations
