Not all food delivery operators are the same

Does the emergence of new food delivery occasions and diverse brand perceptions mean that the consumer wants a new twist?
Bozena Culunlu

January 7, 2019

It is now uncommon to walk down a street in a major city without seeing a delivery rider speeding along. This is reinforced by McKinsey estimating that the worldwide delivery market is worth approximately £75 billion and is set to keep growing. Much of this evolution has been driven by the new “on-demand” players, such as Deliveroo and Uber Eats, who continue their national and global expansion at an exponential rate. Pioneers of the third-party delivery service, they connect consumers with a variety of cuisine types and restaurants and allow effortless browsing through hundreds of menus at any time of day or night.

Meanwhile, the older delivery stalwarts are not far behind. Just Eat have managed to stay strong in the wake of fast-growing disruptor brands. Their purchase of Hungryhouse in 2017 was a further move to dominate the UK delivery scene. And, with brands such as FEAST and MealPal also trying to earn themselves a slice, competition is increasing.

The delivery market has now proved itself to be multi-dimensional. While the three biggest brands in the UK; Deliveroo, UberEATS and Just Eat, all provide a wide range of choice across a variety of restaurants, customer brand perceptions vary from brand to brand. Just Eat will deliver “food from everywhere” with their platform hosting a variety of local takeaways which, only 5 years ago, you would have had to ring to place an order and then pick the food up yourself. Moreover, according to BrandVue Eating Out, Morar HPI’s daily tracker of the eating out sector, Just Eat is highly associated with perceptions of local, good value and affordability, and this is reflected in the high level of trust consumers hold with the brand.  Deliveroo promotes premium restaurants, claiming to deliver from “your favourite restaurants, fast to your door”. So, it comes as little surprise that consumers perceive the brand as offering something new, different and quirky. Think Poke bowls and Bo Buns, which are frequently featured on their Instagram page.

‍But it’s not just the availability of top restaurants that makes Deliveroo seem premium – the actual cost of orders indicates this as well. BrandVue shows that Just Eat do enjoy higher frequency of orders (6.5 vs. 5 of Deliveroo), but the spend is lower (£10.66 vs. £14.75, respectively). Consumers are much more likely to invest in their occasions when ordering from Deliveroo.

“On-demand” delivery has also opened up the opportunity of weekday occasions. Only 29% of customers order from Just Eat on weekdays, compared to 50% of Deliveroo and 45% of UberEats. Furthermore, they have moved the traditional delivery sector goalposts to now include lunchtime as well as dinner. 28% of UberEATS and 26% of Deliveroo orders happen before 5pm, whereas pre-evening cravings are fulfilled by only 6% of Just Eat orders.

No surprise either that UberEATS and Deliveroo orders are more top of mind – 38% of consumers decide to purchase only a couple of minutes before they do vs. 26% for Just Eat. Just Eat is also the more passive and traditional of the three brands, with decisions to purchase being most frequently because of wanting to “eat a specific type of food”, or not being “bothered to cook”. On the other hand, Deliveroo serves as a discovery tool, where the customers predominantly order to “try something new and different”.

Does the emergence of new food delivery occasions and diverse brand perceptions mean that the consumer wants a new twist, and brands like Just Eat risk becoming a “fading star”? According to BrandVue Just Eat is as strong outside of London as it is in, with Deliveroo and UberEATS still behind despite expansion. Moreover, only a minority of Non-Londoners have used them, at 16% and 12%, respectively vs. Just Eat at 45%.

So, is delivery just another “London” trend? What’s clear is that consumers want the best of both worlds; the familiarity and convenience of Just Eat as well as quirky and premium orders from the likes of Deliveroo. The average frequency of delivery in the UK is 3.6 times per year, reaching 4.1 in London but only dropping to 3.3 outside the capital. This signals a great overlap in the customer base for delivery brands, with no rigid culture of disruptors being chosen only in the capital. Brands manage to survive next to each other and compete successfully, but in most cases on different occasions and under different circumstances. Finally, looking at Deliveroo and UberEATS, affinity has grown over time from 19% to 23%, whereas Just Eat is stable (42% in both Q1 and Q2). They are on the right strategic path.

This article was originally published in Casual Dining Magazine in October 2018

Morar HPI Limited is part of MIG Global and part of the Next15 Group.

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