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Why has restaurant food delivery become more expensive recently? —Kenny G., St. Louis
While not true in every case, there are several reasons why delivered restaurant food often does cost more:
1. Higher prices on base menu items: Many restaurants have raised menu prices in response to limited seating mandates, the purchase of new items (such as masks, sanitizers, and to-go materials), and increased wholesale costs for foodstuffs such as meat and produce.
2. Higher prices on delivery menu items: Many restaurants have also raised prices in response to charges levied by third-party delivery companies, which generally charge restaurants between 15 to more than 30 percent per sale.
3. Other fees and costs: In addition to the fees that restaurants pay, third-party services charge the customer a delivery fee, and the customer usually leaves a tip on top of that. Those dollars add up.
But there are ways to mitigate these fees, several of them unknown to consumers.
“It’s my opinion that many of the people who get food delivered a lot don’t even think about the extra fees,” says Derek Deaver, co-owner of Three Kings Public House, with locations in the Delmar Loop, Des Peres, South County, and Lambert Airport Terminal 2. “People develop a comfort level using certain delivery apps. They think the extra charges are what they are, never thinking that there night be a less expensive way."
Restaurants that deliver often have two menus, one with prices for in-house dining and to-go orders and one with higher prices that reflect the fees that restaurants pay to third-party providers.
“We didn’t want to do that, we were forced to do that,” Deaver explains. “The average restaurant's profit margin is about 10 percent and we're being charged double to triple that. Most people don’t even know there are menus with different prices, because why would they? This is something new. And if you go direct to the third-party site to place the order, you may see yet another set of prices."
While Deaver acknowledges the importance of third-party delivery companies and their ability to market participating restaurants, he reminds us it comes at a price, so he developed an in-house delivery program to reduce costs, to both the restaurant and customer. Three Kings charges delivery customers a flat $3 fee (which covers the required insurance) for a delivery within a five-mile radius of the store. "It was confusing to have two sets of menu prices," he told SLM previously, “so self-delivery—which is faster, cheaper, more predictable, and more controllable—only made sense."
Deaver suggests that customers familiarize themselves with a restaurant’s ordering protocol rather than ordering blindly. “And even then, you have to be careful,” he cautions, “since some online ordering platforms charge the same whether the order is delivered or picked up.
"These days, customers can order restaurant food any number of ways," he says. "I just think they should know their options."
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