{"id":6978,"date":"2026-02-19T00:10:02","date_gmt":"2026-02-18T13:40:02","guid":{"rendered":"https:\/\/www.orderoo.com.au\/blog\/?p=6978"},"modified":"2026-03-14T14:23:30","modified_gmt":"2026-03-14T03:53:30","slug":"why-restaurants-struggle-with-delivery","status":"publish","type":"post","link":"https:\/\/www.orderoo.com.au\/blog\/why-restaurants-struggle-with-delivery\/","title":{"rendered":"Why Traditional Restaurants Struggle With Delivery"},"content":{"rendered":"\n<p>Food delivery has transformed the hospitality industry. What was once considered an additional revenue stream is now a core part of many restaurants\u2019 operations. Customers expect convenience, speed, and app-based ordering as standard.<\/p>\n\n\n\n<p>Yet despite the growth of delivery platforms, many traditional restaurants struggle to make delivery profitable.<\/p>\n\n\n\n<p>At first glance, delivery appears simple: more orders should mean more revenue. But financially and operationally, delivery introduces a new cost structure that traditional dine-in models were never designed to support.<\/p>\n\n\n\n<p>Here\u2019s why.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">1. Traditional Restaurants Were Built for Dine-In, Not Logistics<\/h2>\n\n\n\n<p>Most restaurants were designed around:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Table service<\/li>\n\n\n\n<li>Customer experience and ambience<\/li>\n\n\n\n<li>Upselling drinks and desserts<\/li>\n\n\n\n<li>Front-of-house interaction<\/li>\n\n\n\n<li>Controlled table turnover<\/li>\n<\/ul>\n\n\n\n<p>Delivery removes much of that value.<\/p>\n\n\n\n<p>There\u2019s no atmosphere. No drink upsell. No table service. No impulse add-ons. In many cases, alcohol \u2014 one of the highest-margin items in hospitality \u2014 disappears from the order.<\/p>\n\n\n\n<p>Dine-in pricing structures were built to support the full experience. When food leaves the premises, the revenue mix changes significantly.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">2. Commission Fees Compress Already Thin Margins<\/h2>\n\n\n\n<p>One of the biggest challenges comes from delivery platform commission fees.<\/p>\n\n\n\n<p>Industry reports show that most third-party delivery platforms charge restaurants between <strong>15% and 35% per order<\/strong> in commission fees, as outlined in McKinsey\u2019s analysis of the <a href=\"https:\/\/www.mckinsey.com\/industries\/technology-media-and-telecommunications\/our-insights\/ordering-in-the-rapid-evolution-of-food-delivery?utm_source=chatgpt.com\" target=\"_blank\" rel=\"noreferrer noopener\">rapid evolution of food delivery economics<\/a>. On a $30 meal, that could mean $4.50 to $10.50 immediately deducted before any other expenses are paid.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/www.orderoo.com.au\/blog\/wp-content\/uploads\/2026\/02\/Close-Up-of-Delivery-App-Order-Screen-or-POS-1024x576.png\" alt=\"Restaurant POS screen showing digital food delivery orders and pricing\" class=\"wp-image-6980\" srcset=\"https:\/\/www.orderoo.com.au\/blog\/wp-content\/uploads\/2026\/02\/Close-Up-of-Delivery-App-Order-Screen-or-POS-1024x576.png 1024w, https:\/\/www.orderoo.com.au\/blog\/wp-content\/uploads\/2026\/02\/Close-Up-of-Delivery-App-Order-Screen-or-POS-300x169.png 300w, https:\/\/www.orderoo.com.au\/blog\/wp-content\/uploads\/2026\/02\/Close-Up-of-Delivery-App-Order-Screen-or-POS-768x432.png 768w, https:\/\/www.orderoo.com.au\/blog\/wp-content\/uploads\/2026\/02\/Close-Up-of-Delivery-App-Order-Screen-or-POS-1536x864.png 1536w, https:\/\/www.orderoo.com.au\/blog\/wp-content\/uploads\/2026\/02\/Close-Up-of-Delivery-App-Order-Screen-or-POS-2048x1152.png 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\"><em>While digital ordering increases convenience, commission fees and added costs reduce restaurant profitability.<\/em><\/figcaption><\/figure>\n\n\n\n<p>With average restaurant net profit margins often sitting between <strong>3% and 10%<\/strong>, as explored in our breakdown of the <strong><a href=\"https:\/\/www.orderoo.com.au\/blog\/cost-to-run-a-restaurant-australia\/\" target=\"_blank\" rel=\"noreferrer noopener\">real cost of running a restaurant in Australia<\/a><\/strong>, losing up to a third of revenue to commission can eliminate profitability entirely.<\/p>\n\n\n\n<p>In industry surveys, nearly <strong>72% of restaurants identify high delivery platform fees as their biggest operational challenge<\/strong> when working with third-party apps.<\/p>\n\n\n\n<p>What looks like extra revenue can quickly become volume without profit \u2014 one of the structural reasons so many venues struggle to survive, even when they appear busy, as discussed in our analysis of <strong><a href=\"https:\/\/www.orderoo.com.au\/blog\/why-australian-cafes-restaurants-fail\/\" target=\"_blank\" rel=\"noreferrer noopener\">why so many Australian cafes and restaurants fail<\/a> (even when they\u2019re busy)<\/strong>.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">3. Additional Hidden Delivery Costs<\/h2>\n\n\n\n<p>Commission fees are only part of the equation.<\/p>\n\n\n\n<p>Delivery also requires:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Packaging materials (containers, bags, cutlery)<\/li>\n\n\n\n<li>Order management systems or tablets<\/li>\n\n\n\n<li>Additional staff time for packing and coordination<\/li>\n\n\n\n<li>Marketing spend within the app to remain visible<\/li>\n<\/ul>\n\n\n\n<p>High-quality packaging alone can cost $1\u2013$3 per order. When layered on top of commission fees and labour, margins shrink further \u2014 a cost pressure that ultimately contributes to higher menu prices, which we explore in detail in <strong><a href=\"https:\/\/www.orderoo.com.au\/blog\/why-food-is-so-expensive-in-australia\/\" target=\"_blank\" rel=\"noreferrer noopener\">why food is so expensive in Australia<\/a> (and where the money actually goes)<\/strong>.<\/p>\n\n\n\n<p>In some cases, restaurants also pay for sponsored listings or in-app promotions to stay competitive, increasing the true cost of delivery beyond the headline commission rate.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">4. Operational Strain on Kitchens<\/h2>\n\n\n\n<p>Traditional kitchens are structured around predictable service flows \u2014 lunch and dinner peaks, table pacing, and controlled preparation timing.<\/p>\n\n\n\n<p>Delivery disrupts that structure.<\/p>\n\n\n\n<p>Now kitchens must handle:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Dine-in orders<\/li>\n\n\n\n<li>Delivery app orders<\/li>\n\n\n\n<li>Pickup orders<\/li>\n\n\n\n<li>Phone orders<\/li>\n<\/ul>\n\n\n\n<p>Simultaneously.<\/p>\n\n\n\n<p>Without workflow redesign, this often results in:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Slower service<\/li>\n\n\n\n<li>Staff burnout<\/li>\n\n\n\n<li>Increased errors<\/li>\n\n\n\n<li>Declining food quality<\/li>\n<\/ul>\n\n\n\n<p>Restaurants frequently add delivery on top of existing operations rather than restructuring systems to support it.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">5. Menu Items Often Don\u2019t Travel Well<\/h2>\n\n\n\n<p>Many dishes are designed for immediate consumption.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Fried foods lose crispness.<\/li>\n\n\n\n<li>Steaks continue cooking in sealed containers.<\/li>\n\n\n\n<li>Pasta dries out or clumps.<\/li>\n\n\n\n<li>Sauces separate.<\/li>\n<\/ul>\n\n\n\n<p>Dine-in restaurants optimise for presentation and immediacy. Delivery requires durability and transport resilience.<\/p>\n\n\n\n<p>If menus are not redesigned for delivery performance, brand perception can suffer.<\/p>\n\n\n\n<p>Customers judge what arrives at their door \u2014 not how it looked leaving the kitchen.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">6. Labour Increases Without Equivalent Profit<\/h2>\n\n\n\n<p>Delivery increases workload but does not necessarily increase high-quality revenue.<\/p>\n\n\n\n<p>Staff must:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Monitor multiple delivery tablets<\/li>\n\n\n\n<li>Coordinate drivers<\/li>\n\n\n\n<li>Carefully pack orders<\/li>\n\n\n\n<li>Manage customer complaints<\/li>\n\n\n\n<li>Update menu availability<\/li>\n<\/ul>\n\n\n\n<p>This adds labour complexity.<\/p>\n\n\n\n<p>At the same time, commission fees reduce the revenue retained per order. The result is more operational effort without proportional profit growth.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">7. Loss of Direct Customer Relationship<\/h2>\n\n\n\n<p>When customers order through third-party platforms:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The platform owns the customer data<\/li>\n\n\n\n<li>The platform controls communication<\/li>\n\n\n\n<li>The platform manages promotions and advertising<\/li>\n<\/ul>\n\n\n\n<p>Restaurants lose direct access to customer information and loyalty-building opportunities.<\/p>\n\n\n\n<p>Over time, this increases dependency on platforms and reduces brand control.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">8. Increased Price Competition<\/h2>\n\n\n\n<p>Delivery apps place restaurants side-by-side in a single marketplace.<\/p>\n\n\n\n<p>Customers compare:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Price<\/li>\n\n\n\n<li>Ratings<\/li>\n\n\n\n<li>Photos<\/li>\n\n\n\n<li>Delivery time<\/li>\n\n\n\n<li>Promotions<\/li>\n<\/ul>\n\n\n\n<p>This transparency increases price sensitivity and pushes restaurants toward discounting.<\/p>\n\n\n\n<p>Combined with commission fees, this can significantly reduce profitability.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">9. The Broader Industry Context<\/h2>\n\n\n\n<p>Globally, the food delivery market has grown into an industry worth over <strong>US$150 billion<\/strong>, reflecting strong consumer demand for convenience. Regulatory insights into platform dynamics and competitive pressures in Australia are discussed in the ACCC\u2019s <a href=\"https:\/\/www.accc.gov.au\/system\/files\/digital-platform-services-inquiry-final-report-march2025.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">D<\/a><a href=\"https:\/\/www.accc.gov.au\/publications\/digital-platform-services-inquiry-2020-2025\">igital Platform Services Inquiry (2020\u20132025)<\/a>.<\/p>\n\n\n\n<p>However, rapid growth at the platform level does not automatically translate into sustainable profits at the restaurant level.<\/p>\n\n\n\n<p>Many traditional restaurants discover that delivery revenue increases turnover \u2014 but not necessarily net income.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">The Core Issue<\/h2>\n\n\n\n<p>Traditional restaurants struggle with delivery because their original business model was not designed for:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>15\u201335% commission deductions<\/li>\n\n\n\n<li>Additional packaging expenses<\/li>\n\n\n\n<li>Platform marketing fees<\/li>\n\n\n\n<li>Dual operational workflows<\/li>\n\n\n\n<li>Loss of high-margin dine-in upselling<\/li>\n<\/ul>\n\n\n\n<p>Delivery is not simply an extra sales channel. It is a fundamentally different cost structure layered onto an existing one.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h1 class=\"wp-block-heading\">Final Thoughts<\/h1>\n\n\n\n<p>Delivery is not inherently unprofitable \u2014 but it requires structural adaptation.<\/p>\n\n\n\n<p>Restaurants that treat delivery as a minor extension of dine-in operations often struggle. Those that redesign menus, adjust pricing strategies, optimise workflow, and analyse delivery-specific margins are better positioned to succeed.<\/p>\n\n\n\n<p>In today\u2019s hospitality environment, delivery may be necessary to remain competitive. But profitability in delivery is never automatic.<\/p>\n\n\n\n<p>Understanding the financial and operational realities is the first step toward making delivery work \u2014 rather than letting it erode margins over time.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Food delivery has transformed the hospitality industry. What was once considered an additional revenue stream is now a core part of many restaurants\u2019 operations. Customers expect convenience, speed, and app-based ordering as standard. Yet despite the growth of delivery platforms, many traditional restaurants struggle to make delivery profitable. At first glance, delivery appears simple: more [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":6979,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_themeisle_gutenberg_block_has_review":false,"footnotes":""},"categories":[491],"tags":[212],"class_list":["post-6978","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-food-business","tag-featured"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why Traditional Restaurants Struggle With Food Delivery (2026)<\/title>\n<meta name=\"description\" content=\"Learn why traditional restaurants struggle with food delivery profitability. Explore commission fees, hidden costs and operational challenges in 2026.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.orderoo.com.au\/blog\/why-restaurants-struggle-with-delivery\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why Traditional Restaurants Struggle With Food Delivery (2026)\" \/>\n<meta property=\"og:description\" content=\"Learn why traditional restaurants struggle with food delivery profitability. Explore commission fees, hidden costs and operational challenges in 2026.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.orderoo.com.au\/blog\/why-restaurants-struggle-with-delivery\/\" \/>\n<meta property=\"og:site_name\" content=\"Orderoo Blog\" \/>\n<meta property=\"article:published_time\" content=\"2026-02-18T13:40:02+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-03-14T03:53:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.orderoo.com.au\/blog\/wp-content\/uploads\/2026\/02\/Restaurant-Kitchen-With-Delivery-Tablets-Visible.png\" \/>\n\t<meta property=\"og:image:width\" content=\"2240\" \/>\n\t<meta property=\"og:image:height\" content=\"1260\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Ankush\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Ankush\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.orderoo.com.au\/blog\/why-restaurants-struggle-with-delivery\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.orderoo.com.au\/blog\/why-restaurants-struggle-with-delivery\/\"},\"author\":{\"name\":\"Ankush\",\"@id\":\"https:\/\/www.orderoo.com.au\/blog\/#\/schema\/person\/32ec5f114d8c2519336f5eb6af57830b\"},\"headline\":\"Why Traditional Restaurants Struggle With Delivery\",\"datePublished\":\"2026-02-18T13:40:02+00:00\",\"dateModified\":\"2026-03-14T03:53:30+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.orderoo.com.au\/blog\/why-restaurants-struggle-with-delivery\/\"},\"wordCount\":966,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.orderoo.com.au\/blog\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.orderoo.com.au\/blog\/why-restaurants-struggle-with-delivery\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.orderoo.com.au\/blog\/wp-content\/uploads\/2026\/02\/Restaurant-Kitchen-With-Delivery-Tablets-Visible.png\",\"keywords\":[\"Featured\"],\"articleSection\":[\"Food Business\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.orderoo.com.au\/blog\/why-restaurants-struggle-with-delivery\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.orderoo.com.au\/blog\/why-restaurants-struggle-with-delivery\/\",\"url\":\"https:\/\/www.orderoo.com.au\/blog\/why-restaurants-struggle-with-delivery\/\",\"name\":\"Why Traditional Restaurants Struggle With Food Delivery (2026)\",\"isPartOf\":{\"@id\":\"https:\/\/www.orderoo.com.au\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.orderoo.com.au\/blog\/why-restaurants-struggle-with-delivery\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.orderoo.com.au\/blog\/why-restaurants-struggle-with-delivery\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.orderoo.com.au\/blog\/wp-content\/uploads\/2026\/02\/Restaurant-Kitchen-With-Delivery-Tablets-Visible.png\",\"datePublished\":\"2026-02-18T13:40:02+00:00\",\"dateModified\":\"2026-03-14T03:53:30+00:00\",\"description\":\"Learn why traditional restaurants struggle with food delivery profitability. 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