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Not doing delivery? You’re late

Grubhub CEO: Consumers are replacing frozen foods with restaurant meals at home.
Scott Mitchell

Restaurant companies that aren’t doing delivery have some ground to make up, if they’re going to do it.

So says Matt Maloney, the CEO of Grubhub. “If you’re not thinking about it yet, you’ve missed the train,” he said at the Restaurant Leadership Conference on Monday in Phoenix. “You have some catchup to do. Most major restaurant groups are actively thinking about what they’re going to do to take advantage of the online opportunity, including delivery.”

Jeremy Stoppelman, the CEO and co-founder of Yelp, interviewed Maloney in a two-person session.

In a space made up of several third-party companies, Maloney’s Grubhub remains a massive player in the online ordering and delivery business. The company takes 400,000 orders a day, on average. “While there’s a lot of excitement,” he said, “Grubhub is still twice as large as anyone out there.”

Maloney believes that online ordering and delivery will be a major part of the future of foodservice as consumers shift away from frozen food. “I believe we’re in a transitional shift in the population from frozen foods or Costco over to little restaurants,” he said. “It’s more available and more realistic. We’re in a 10- t0 20-year cycle where more people are relying on their local restaurant kitchens.”

Getting more consumers to shift their spending that way, however, will require lower fees—both to the operator and passed to the consumer. The lower the transactional fees, or “toll,” the more likely consumers will order delivery. Technology will be key for this.

“Any technology that is really going to move the needle is behind the scenes,” he said. “What can we do to get food there faster, hot and efficiently?”

One thing it won’t be: drones. “We won’t see all the stupid garbage about drones or automated robots,” Maloney said, noting that drone delivery of restaurant food isn’t doable in urban areas where delivery is most popular.

“Where do you land a drone in a city, on the roof?” he said. “How do you deliver it to a high-rise?”

Maloney does believe that the third-party delivery sector, which has lured a lot of investment in recent years, is beginning to consolidate. He calls that a “good thing.”

“A lot of money has been invested in companies that didn’t have a good idea,” Maloney said. “There’s still a lot of inefficiency in the market. There’s a lot of change. There are too many products doing silly things.”

Yelp, meanwhile, has become a mainstay for customers looking at restaurant reviews. Yelp’s sites have 100 million unique visitors, with 30 million visitors to its mobile sites. Yelp reviews are on Apple Maps, Apple’s Siri and Amazon’s Alexa. Even some cars are loaded with Yelp data.

The company is now getting into Wi-Fi marketing. But Stoppelman also says that its Nowait app could get more customers in the door at casual-dining restaurants by enabling customers to get on the waitlist from their phone, rather than at the front door.

“It’s time to retire the sticky coaster,” he said.

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