Delivery

Study identifies maximum restaurant delivery 'doughnut' area

Photo: iStock.

July 7, 2021

How wide an area should a restaurant focus on for maximum profit from delivery orders? Well, according to the research from delivery software provider, Vromo, the "doughnut" or area around any given restaurant should be approximately 2.14 miles wide from maximum returns for restaurants that self-deliver, according to a news release.

As a result, the company recommends that self-delivery brands instead allocate deliveries that fall outside that space to other delivery service providers or DSPs. To determine the ideal delivery perimeter for such restaurants, Vromo analyzed data from its U.S.-based platform users.

The company said that the data shows that beyond that 2.14-mile mark, it is more cost-effective to use DSPs, as it gets harder for restaurants to run profitable delivery services using their own fleets of drivers and riders. Offering delivery to more-distant areas will obviously bring many new customers and increase revenue, but using an in-house delivery fleet to cover them will often bring inefficiency.

Some contributing factors include the requirement for additional drivers, more driver idle time as they return to the restaurant, fewer opportunities to merge deliveries and, finally, having to extend the delivery time that the customers can expect, which can deter customers from ordering.

"The pandemic forced many restaurants to pivot to delivery, primarily as a way to keep trading," Vromo CEO Alan Hickey said in the release. "But as restrictions are lifted and we get back to something like normal life, those restaurants that manage delivery very well and make it a seamless part of the overall dining experience will thrive."