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Delivery revenue is surpassing on-premise sales

Delivery revenue is expected to grow at more than triple the rate of on-premise sales to a compound annual rate of 22% through 2023. Most of that growth is coming from digital orders, according to a February report from global strategy consulting firm LEK Consulting.

The report — “Meals on Wheels: The Digital Ordering and Delivery Restaurant Revolution” —predicted the value of digital orders will balloon from $25 billion in 2018 to $68 billion in 2023.

“Online ordering has captivated a diner demographic increasingly pressed for time and harboring expectations shaped by the sophisticated world of consumer ecommerce,” authors Maria Steingoltz and Manny Piccola said in the report.

Restaurants are quickly evolving to keep up with demand, whether through in-house delivery, third-party apps, or a hybrid solution.

According to recent data from the National Restaurant Association, more than half of delivery customers order their food delivery online, with the next biggest source of revenue coming from third-party apps. In response, 37% of restaurants now offer online ordering and 32% accept mobile payments.

The digital customer userbase is getting younger too: By 2020, customers ages 21-36 will make up 70% of at-home delivery services, the NRA projected.

Contact Joanna Fantozzi at [email protected]

Follow her on Twitter: @JoannaFantozzi

TAGS: Finance
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