UnifyOrdering: Food Hubs Outside Dublin Outperform the City by 23% Driven by Staycations and Remote Working
- Over a quarter of all new openings are now mobile businesses
- “Ghost Kitchens” account for 4.9% of new business registrations since July 2020
- 58% of restaurants now outsourcing items traditionally made in-house such as baked goods compared to pre-pandemic due in large part to staff shortages
- Trend alert: Growth in home cooking and the need for business diversification increases number of independent condiment businesses
Average order volume in all areas across the country increased by 48.3% when outdoor service resumed in June according to data compiled by Unify Ordering, the restaurant industry app replacing the fragmented ordering process for over 2000 Buyers and Suppliers. However, volumes remained relatively static in Dublin City Centre with the major increases coming from outside the city.
Orders from Dublin suburbs continued to increase by 12.6% in activity since June. With particular standouts being Howth which saw an increase in activity by 13.2% and Dun Laoghaire that saw an increase by 14.6%, as consumers choose to remain local even after restrictions due to Covid-19 were eased.
Outside of Dublin order volumes and basket sizes grew nationally by 23.6% after indoor dining resumed on the 26th of July.
Commenting on these trends, CEO and co-founder of Unify Ordering, Barry McNerney, said “Perhaps one of the longer-term trends seen is that of the movement and re-distribution of people from centralised areas to non-centralised, from urban to rural and urban to suburban. Subsequently feeding into a rise of localism and local spending as populations shift away from larger areas and congregate closer to home. As a result, establishments on the outskirts of Dublin city, in smaller towns and suburbs have seen an increase in customers and sales.
McNerney added, “It remains to be seen what level of growth will return to Dublin City and other urban areas from September onwards when the holiday season dies down and as more city-centre offices begin to reopen, we will be watching ordering data closely over the coming weeks to get a better understanding of the long term trends.”
Unify Ordering data shows increases in average order size and restaurant, cafe and retail concentration in the populated suburbs of Dun Laoghaire, Sandymount, Bray, Terenure, Rathgar, Malahide, Sandycove, Monkstown and Glasthule, attributing the new norm of remote working as a key reason for this suburban shift.
Staycation hotspots have seen order volumes skyrocket in the last year, particularly picking up in May of this year, suggesting that the Irish staycation season was strong in certain areas.
Irish staycationers have sparked an increase in activity in the South East. Major growth was registered in the Southeast of Ireland with overall growth in Restaurant, cafe and retail performance from July 2020 to July 2021. The average number of items per basket increased by an average of 137.5% in the region, with large increases registering in Wexford of 188.2%. The average total order value increased by an average of 57.8% in the Southeast with Wexford once again outperforming other areas with a 71.7% increase.
Increases in the South West were also high but not as significant as Wexford. The average total order value increased by 43.9% in Cork and the average item per basket rose by 86.6%.
However, growth in the West of Ireland was less pronounced. Galway experienced a 2.9% increase in average item per basket, but the average total order value decreased by 15.3%, while also indicating that orders with speciality suppliers have not picked up just yet.
Mobile Businesses and “Ghost Kitchens”
With the uncertainty surrounding the industry throughout the last 18 months, many new and experienced operators have pivoted and set up mobile outlets to follow demand.
With 25.6% of all new openings being mobile businesses, these outlets have given people a great opportunity to enter the industry because of significantly reduced start-up costs compared with traditional “bricks and mortar” businesses. They generally target outdoor areas popular with the public such as beaches, parks and walking routes. The majority of the mobile businesses offer specialty coffee and treats but we have seen growth in Food Trucks as well.
Similarly “Ghost Kitchens” were not common in Ireland even 18 months ago but now account for almost 4.9% of all new business registrations on the UnifyOrdering platform since July 2020.
Ghost kitchens are restaurants that do not have storefronts, only exist online or on food aggregators such as Deliveroo or Just Eat. Many of these ghost kitchens are completely new stand alone brands, others are well-known brands who have moved food production to warehouse locations or internalised them within other existing premises, in order to serve new geographic locations and avail from savings.
Outsourcing and Centralization
Businesses in the hospitality sector are experiencing heavy staff shortages.
The Unify Ordering team identifies that over the last six months, 58.3% of establishments have either outsourced production of goods traditionally made in house or have moved production to Centralised Production Units (CPUs).A CPU is a centralised production unit set up by a business to supply all its branches with their own product offerings.
Items such as bread, pastries, bars, desserts and lunch offerings such as sandwiches and salad bowls are now being heavily outsourced. This has resulted in an increase of new commercial kitchens stocking restaurants, cafes and new mobile micro eateries.
According to Unify Ordering data restaurants are operating with reduced hours in comparison to pre-pandemic times with a 38% decrease in orders from establishments at the beginning of the week. A 24% reduction in items per basket also suggests that restaurants are reducing the number of items on their menus.
This reflects the anecdotal evidence within the industry of there being a lack of staff and experience within the industry.
Technology solutions have become essential for management in finding ways to be efficient and continue to offer customers quality produce and customer experience
As of August, the majority of restaurants are implementing various tech solutions to run their businesses more efficiently such as Staff rostering, POS systems, Delivery platforms, Ordering systems. Management has adapted by using platforms such as UnifyOrdering to gain efficiencies and save time and money.
With the challenges facing businesses post-pandemic, operators are being left with little option but to abandon antiquated practices with the likes of pen and paper and opt for digitilased processes.
Condiments of the chef
There is a growing trend in established businesses becoming wholesalers and releasing their own brand products.
Unify Ordering has seen an increase in condiment focused businesses since September 2020, with 15.5% of new supplier businesses on the platform being condiment focused. These products range from Japanese inspired peanut rayus, vegan mayos, Louisiana hot sauces, to uniquely sweet and savoury nut butters. Some of the most notable suppliers being Harry’s nut butter, Masaalon, Nutshed and Too savage.
There was also a 42.3% decline in the quantity of ‘speciality suppliers’ which are non-essential, luxury and often more expensive products in the period between September 2020 and June 2021 due to restaurants ordering primarily from one main supplier for cost efficiency.
However, the sales team at Unify Ordering have seen a resurgence since June, with continuous growth in this area as vibrancy returns to the industry. This demonstrates that restaurants and retailers are actively looking to find new local producers and shortening their supply chain.