SAN FRANCISCO — A year ago Mendocino Farms didn’t offer delivery at any of its 15 Southern California locations. Now Ellen Chen, co-founder of the artisanal sandwich chain, is knocking down restaurant walls to make room for delivery drivers.
“It’s kind of crazy,” Ms. Chen said.
Since partnering with the San Francisco food delivery startup DoorDash 11 months ago, Mendocino Farms has seen such an enormous surge in sales that at times the restaurant has had to turn off the DoorDash app to keep up with delivery orders. Ms. Chen estimates that three of Mendocino’s restaurants alone have turned away at least $500,000 in DoorDash orders since last April because they couldn’t keep up with the demand.
Not wanting to leave any more money on the table, Ms. Chen and her business partner and husband, Mario Del Pero, have been quick to act. They’ve allocated more counter space at their existing restaurants for DoorDash pickups; they’re negotiating with landlords for more 10-minute parking spots to accommodate delivery drivers; and they’re knocking through a wall at one location to create a pickup window just for DoorDash orders.
“We’ve had to go back to every store and reorganize them,” Mr. Del Pero said. “You can’t make them any bigger, but you can allocate more space to it.”
The advent of apps such as DoorDash, UberEats, Caviar, GrubHub, and Yelp’s Eat24 — where users can browse a menu, place an order, and have it delivered without communicating directly with a restaurant — has quickly given anyone with a smartphone (and the funds to cover the delivery surcharge) on-demand access to a wider swath of dining options.
For many restaurants in big cities like Los Angeles, app-enabled food delivery services have gone from being an afterthought to a core part of their business, with restaurateurs realizing that smartphone apps don’t cause a drop-off in dine-in customers, but instead help grow a new customer base.
Mendocino Farms, for example, saw sales increase 2 percent to 3 percent shortly after it began its partnership with DoorDash. They have continued to climb, resulting in an additional $2.5 million in revenue. In an industry in which margins are already razor thin, squeezing more revenue from existing restaurants is a major win. DoorDash deliveries now account for 6 percent of Mendocino’s business.
Other restaurants have noted similar upticks in sales. Burger chain Bareburger last year partnered with five delivery apps for its West Coast flagship outside Los Angeles. In the three months after the partnerships, it saw an 8 percent to 9 percent increase in sales. In the last two months, that figure has increased to 13 percent.
First Published April 15, 2017, 4:00 a.m.
