Restaurants Go Where the Customers Are: Home!
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The powers that be behind both Room Service and Chef’s Express believe the service they offer will grow more popular for a couple of good reasons: people are working longer hours, and for many yuppie couples with young children, going out to dinner is more of a bother than eating at home. That suits the operators of these services just fine. At Chef’s Express, an arm of the Levy Restaurants chain, as much as 20 to 35 percent of the total cost of a delivered dinner can drop to the bottom line, versus 12 to 20 percent of the cost of a dinner ordered in a restaurant. “When customers order through Chef’s Express,” explains manager Paul Tumberger, “we don’t have to add extra waiters, bartenders, or cooks.” When the weather is bad and Levy restaurants are empty, use of Chef’s Express shoots up accordingly. Room Service, an independent delivery service that contracts with the restaurants on its roster, pockets between 25 and 35 percent of the total cost of each order, plus a $4 delivery surcharge for each restaurant from which food is ordered. Room Service, which started approximately three years ago, has had more time to perfect its operation; Chef’s Express has the advantage of charging no delivery fee. Convenience rather than cost, however, seems to be more of a concern to those using the services. According to Room Service CEO Brian Keil, research indicates that his customer base is affluent, well-educated, and surprisingly young, almost three-quarters between the ages of 25 and 44. About 72 percent earn more than $50,000 a year, and 58 percent have some sort of postgraduate degree.
Will the growth of Room Service and Levy’s entry into the delivery business bring other major players in? Rich Melman’s mammoth Lettuce Entertain You Enterprises says it has no plans at the moment to follow the Levy organization into the home delivery business. But LEYE already offers food from three of its restaurants through Room Service. And if the business continues to grow, LEYE could be convinced it pays to deliver.
Steve Edelson Gets Tough
