Changing Consumer Preferences Boost Takeaway Demand as Restaurants Adjust to New Norms
The COVID-19 pandemic has profoundly impacted Singapore’s food and beverage (F&B) industry. At its lowest point during the “circuit breaker” in 2020, sales plummeted by 51 per cent year-on-year. While the sector has seen some recovery, recent restrictions have led to a decline in sales compared to the peak of the pandemic in late 2020, with Q3 2021 sales dropping below the previous year.
In response to shifting consumer behaviours, recent data from the Customer Satisfaction Index of Singapore (CSISG) revealed that, while the preference for dining in remains steady, there has been a notable increase in takeaway orders. More than 50 per cent of customers in the fast food and café sub-sectors opted for takeaways, in contrast to fewer than 25 per cent choosing delivery. This trend mirrors patterns observed in the United States, where studies show that around two-thirds of Americans are now more likely to purchase takeaway than pre-pandemic.
From a financial perspective, the takeaway trend benefits restaurants due to the higher profit margins. For a $50 order, the profit from a takeaway is $32.50, compared to just $17.50 for a delivery order, which incurs additional commission fees for delivery platforms. Even with discounts for takeaway orders, the margins remain favourable compared to delivery.
Despite the financial advantages, the CSISG study highlighted areas for improvement in the customer takeaway experience. Satisfaction with takeaway orders lagged behind delivery orders in key aspects such as menu clarity, ease of finding desired items, the ordering process, and timely food delivery.
To capitalise on this growing demand for takeaway, restaurant operators should focus on enhancing the customer experience. Recommendations include simplifying menus to make them easier to navigate, ensuring customers can easily locate essentials like condiments and napkins, streamlining the ordering process, and reducing wait times. By improving these areas, restaurants can boost customer satisfaction and maximise the profitability of takeaway orders, offering a clear advantage over delivery services.
