Fast food apps will force a quarter of High Street curry houses out of business and TRIPLE the cost of a takeaway to £75 within a decade, experts warned yesterday.
Whilst intermediaries like Deliveroo and UberEats do drive online sales, their alleged “unfair and grossly disproportionate” commission fees are said to be eating into revenue and swallowing up restaurants’ meagre profits, it is claimed.
Many curry houses are said to be losing money on EVERY app-based order they receive.
The apps are also said to reduce foot traffic and table bookings – a previously lucrative mainstay – as consumers embrace the convenience of choice and home delivery.
Britain’s curry industry is already suffering from immigration laws and from social mobility among second-generation Indians and Bangladeshis.
As many as two restaurants and takeaways are currently closing each week, according to reports.
But there are now fears that one-in-four of the curry houses that offer their wares on commission-based apps will disappear from the UK High Street by 2030.
Those that survive into the Thirties will be forced to increase their prices to recoup the charges and stay afloat, with the average cost of a takeaway for two rising from around £25 to £75 in most cities, it is claimed.
There are now calls for restaurant owners to respond to the threat in order to prevent the “total collapse” of a £3.6billion sector that employs an estimated 100,000 people nationwide.
Restaurateur Asad Khan, the owner of India Dining in Warlingham, Surrey, said existing online delivery apps pose the greatest threat to the British curry house trade since the 1970s.
He said: “Restaurants that sign-up to online delivery apps do receive an increase in takeaway orders. But high commission rates mean they are frequently operating at a loss on every app-based order they receive because the cost of preparing an authentic dish and the price of its ingredients is more than what those restaurants actually receive.
“When coupled with existing staffing issues, these unfair and grossly disproportionate charges are by far the gravest threat to curry houses since their introduction to the UK high streets.”
Khan, a curry house entrepreneur who has previously worked for some of London’s most successful Indian eateries, added: “It is as such feasible – and perhaps even probable – that at least 25 per cent of establishments that have signed-up to these types of services will close in the next five or so years and, by extension, that takeaway prices from the remainder will rise by a third in most major cities thereafter. This could mean paying up to £75 for a curry for two in the near future.”
The grim forecast follows reports of a national ‘curry crisis’ fuelled in part by the retirement of the original wave of Indian and Bangladeshi immigrants who set up curry houses in the 70s. Immigration changes, meanwhile, have made it more difficult to bring trained chefs to the UK from abroad.
But the biggest challenge facing the sector is said to lie in the popularity of fast food apps and the public’s growing appetite for fast home delivery.
In exchange for driving online sales, some apps charge a joining fee whilst most also earn a commission – of between 20 and 40 per cent – on each order placed through their website or app.
Some pocket the consumer’s delivery charge, too.
It is a recipe for success that has grown into a US$100billion global industry.
But the apps have attracted criticism for their alleged effect on restaurants’ notoriously slim profit margins, and for imposing legal clauses that reportedly prevent members from increasing their prices.
In response to what he calls this “emerging threat”, Khan has now launched an ethical delivery service that he says rivals the likes of Deliveroo.
The new portal, called Offie was developed with Ash Ali, the former marketing director at Just Eat.
It offers restaurant owners similar benefits to existing apps but without commissions, contracts and order limits.
Offie’s operations director Ashok Balakrishnan said: “A curry has become as synonymous with British culture as fish and chips, and we want it to stay that way for generations to come. “This can only be achieved if restaurant owners recognise the damage that high-commission fast food apps are having on the UK’s most beloved adopted national dish.”