Restaurants shrink as food delivery apps get more popular

(Oct 31): Don Fox, the chief executive officer of Firehouse of America LLC noticed something strange a couple of years ago: during the midday lunch rush, his sandwich shops were relatively empty, but sales were better than ever. "I'd be thinking, ‘Boy, business must be pretty bad.’ But the numbers were telling me a different story."

People are still eating restaurant food -- they're just not doing it at restaurants as much. Delivery apps from DoorDash Inc, Postmates Inc, GrubHub Inc and UberEats have made ordering in easier, and have changed the way food chains think about their business. The number of food delivery app downloads is up 380% compared with three years ago, according to market-data firm App Annie, and research firm Cowen and Co. predicts that US restaurant delivery sales will rise an average of 12% a year to US$76 billion ($105.3 billion) in the next four years.

At Firehouse, revenue has increased 7% this year, mainly from orders placed online and through delivery apps, Fox said. More than half of his sales are for food eaten elsewhere.

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