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Food delivery services surge during pandemic

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MADISON (WKOW) -- Industry experts estimate restaurants in Wisconsin have lost more than $630 million since the coronavirus pandemic began.

Takeout and delivery have become their lifeline, keeping restaurants like Taqueria Guadalajara afloat as they wait to reopen their dining rooms.

"Definitely a large portion of our sales are dine in, however, the community and the people that frequent this establishment, they've come back and they've shown their support," said General Manager Jorge Perez.

Perez and his family run the business that's been on Park Street in south Madison for more than a decade. They've been able to get by without losing workers, by dropping carryout prices and leaning on their partnership with EatStreet.

"We have been working with EatStreet, trying to come up with promotions or finding other ways to increase the volume of orders," Perez told 27 News.

Growth in Food Delivery Services

EatStreet founders, Matt Howard, Alex Wyler, and Eric Martell, 2011

EatStreet, which was founded by three UW-Madison grads in 2010, is part of a growing trend in online food delivery services, fueled even more by the pandemic.

"We're happy that we laid the groundwork for everything needed to help restaurants during the pandemic," said co-founder and CEO Matt Howard. "We've been working very hard for, like you said, 10 years, for the ability to scale like this and we're very happy to help however we can."

Online food delivery services offer restaurants a platform to sell meals and drivers to pick up and deliver them.

Morgan Stanley's research team predicts online food delivery spending in the US could grow by 18 percent every year. Kenneth Research anticipates the pandemic will grow the global market by more than 16 percent from 2019 – 2024.

"The pandemic has definitely just moved up the timeline for the growth, it was inevitable that delivery was going to continue to grow into the future as consumers adopted to these ordering apps like EatStreet, but I think everything just kind of speeded up with the pandemic," Howard said. "Consumers know that they have to help their restaurants in order for them to stay in business."

EatStreet has seen record growth in the past six weeks, with 50 new restaurant partnerships and many new customers. The company has had to hire 100 new drivers since the pandemic began, in the Madison area alone. Drivers have also implemented new safety measures, like contactless drop-off and PPE use.

Concerns for the Industry

But industry experts warn not all delivery service companies build good partnerships with businesses.

"People might think that ordering through some of these third-party deliveries that they're really helping the restaurant. The dollars that they're getting may not even pay for the food that they're serving," said Kristine Hillmer, president and CEO of the Wisconsin Restaurant Association.

Hillmer says the best way to make sure your money is going where you intend it, is to contact the restaurant to find out their preferred sales method.

"As soon as [the order] leaves the restaurant, the restaurant has lost any control over it, so that's why it's critically important to contact the restaurant directly, order through them, they will tell you the best way to get it," Hillmer said.

The association says 44 percent of Wisconsin restaurants temporarily closed after the pandemic began. Some of those closures became permanent.

"This is really, really devastating and the longer it goes on, the worse it will get," she told 27 News.

The best way you can help, is continuing to place orders at businesses like Taqueria Guadalajara, a staple for their neighbors.

Jorge Perez, Taqueria Guadalajara general manager

"We feel comfortable with the support that we've been getting now from customers and from what we've had before," Perez said. "We'll make it through and I just hope the same can be said for a lot of other small businesses in the community."

For more information and resources on the COVID-19 pandemic's impact on restaurants, click here.

Jennifer Kliese

Weekend Anchor and Reporter, 27 News

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