News | September 24, 2021

Food Delivery Profitability Remains a Hot Topic

A widely-read Kauppalehti analysis of a Helsinki restaurant's delivery numbers has reignited debate over whether food delivery can actually be profitable. High courier commissions and thin margins are squeezing restaurants even as order volumes climb - but dynamic pricing is emerging as one way out.

Kauppalehti recently published an analysis about a Helsinki restaurant that achieved 570,000 euros in revenue through courier services within four months, yet failed to achieve profitability due to elevated courier commissions.

Delivery platforms like Wolt and Foodora collect approximately 30 percent of each order's value, with the majority allocated toward messenger compensation. The combination of high commissions and thin industry margins creates a challenging environment where restaurants struggle to profit despite increased sales volume. Beyond platform fees, restaurants face packaging expenses, utensils, and delivery containers that further compress margins.

Dynamic pricing as a way forward

Kotipizza implemented dynamic pricing for its delivery service, adjusting fees based on demand fluctuations. CEO Heikki Lummaa explained: "We lowered the fixed delivery price during quiet times – and magic happened." The strategy expanded off-peak sales while maintaining weekend volumes, with delivery fees ranging from 2.90 to 7.90 euros. Director Johanna Kuosmanen noted the approach generated "double-digit growth figures in both delivery volumes and sales."

The article suggests dynamic discounts on pickup options could incentivize customers to collect orders themselves, reducing transportation expenses during slower periods.


Thomas Gräsbeck

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