Lexalytic

Which dishes lose you money on delivery?

A £12 dish on Deliveroo returns about £8.40 after commission, before you have taken the VAT off or paid for the box it went in. Most kitchens price delivery identically to dine-in, which means the dishes with the thinnest margins are quietly losing money on every order.

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Which channel?
%
Typically 25 to 35 per cent depending on whether you use their riders. VAT comes off before commission is applied, which catches people out.
Dish
Dine-in price
Food cost
Delivery price
Orders a week
£448.67
Gross margin a week from these dishes on deliveroo
34.0%
Against 64.4% dine-in
0
Losing money per order
£23,330.67
A year at this rate
Every dish is contributing, but the margin is 30.4 points below what the same dishes earn dine-in. That gap is what the platform takes.
Some of your delivery prices match your dine-in prices. Delivery menus generally need 8 to 12 points more margin than dine-in to end up in the same place, which usually means pricing 15 to 25 per cent higher. The platforms allow it and most operators do it.
Dish by dish
Break even is what you would need to charge to stop losing money. Match dine-in is what you would need to charge to earn the same margin percentage as the restaurant.
Steak frites
12 a week
£3.75
per order
19%
vs 51% in
£17.57
break even
£64.74
to match dine-in, 170% more
Chicken burger
40 a week
£3.81
per order
32%
vs 65% in
£7.97
break even
Margherita pizza
65 a week
£3.87
per order
42%
vs 77% in
£4.37
break even
What people actually do
  • Price the delivery menu separately. Fifteen to twenty five per cent above dine-in is normal and customers are used to it. Every platform allows it.
  • Take the worst offenders off delivery entirely. A dish losing money on every order does not need repricing, it needs removing from that menu.
  • Push the ones that travel well and carry margin. The platform algorithm rewards what sells, so what you promote matters.
  • Check the commission you are actually on. Rates vary by tier and by whether you use their riders, and the one you signed up on may not be the one you are paying now.
  • Remember the platforms report your income to HMRC. Delivery turnover is visible whatever your records say, so the two need to agree.
This changes every time a price moves

Ingredient costs move weekly and platform rates change without much warning, so a dish that worked in January can be losing money by March. We are building something that keeps this current rather than making you redo it.

See Margin ManagerOr check your margin against the benchmarks

Built by Lexalytic. See our other free tools.

Commission rates are the published standard tiers. Your agreement may differ, and platforms change their terms, so treat the platform rate as a starting point and check it against your own statement. VAT treatment assumes a registered business selling standard rated food.

Commission rates are typical rather than yours, and vary by tier, by contract and by whether the platform provides the rider. Check your own statements. This covers food cost and packaging only, not the kitchen labour a delivery order takes, so the real position is slightly worse than shown.

Questions

How much commission do delivery platforms take in the UK?

Typically twenty five to thirty five per cent where the platform provides the rider. Just Eat order-only arrangements are lower, often around fourteen per cent, because you deliver yourself. Rates vary by contract and tier, so check your own statements rather than assuming the headline figure.

Should I price my delivery menu higher than dine-in?

Delivery menus generally need eight to twelve percentage points more margin than dine-in to end up in the same place, which usually means pricing fifteen to twenty five per cent higher. Every major platform permits this and most operators do it. Pricing identically means the platform commission comes entirely out of your margin.

Is VAT taken off before or after delivery commission?

The customer pays a VAT inclusive price, and the VAT is not yours to keep. Commission is then charged on the sale. So on a twelve pound dish for a VAT registered business, you are working from ten pounds net before the platform takes its share, not twelve. This catches a lot of operators out.

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