A food technology start-up luring diners off their sofas and back into restaurants is on the march in Australia and eyeing expansion overseas with the help of celebrity chef and shareholder Marco Pierre White.
In the space of five months EatClub, a dynamic pricing platform that enables restaurants to offer last-minute deals to attract diners and fill empty tables has signed up 470 restaurants in Melbourne and Sydney – including Papa Goose, Bill’s in Bondi, Red Spice Road and Burma Lane – and more than 60,000 customer downloads.
EatClub is planning to expand to Brisbane and Adelaide in the next few months and is developing plans to move into Britain, US and parts of Asia.
Three of the people behind EatClub – Suppertime founders Nathan Besser and David Birger and former Foodora executive Pan Koutlakis – were pioneers of the $1.5 billion online food delivery market but are now helping restaurants win back customers from aggregators such as Foodora, Deliveroo, Uber Eats and Menulog.
“We think restaurants should be busier more often,” said Mr Koutlakis, a former Melbourne chief executive of Foodora, which acquired Suppertime in 2014.
“Food delivery can be beneficial for restaurants that keep their dine-in trade alive but it seems that in Australia the food delivery business is cannibalising the dine-in trade, which is affecting the economics of businesses.”
A recent Morgan Stanley report found that restaurants signing up with aggregators needed more than 50 per cent of sales to be incremental to avoid squeezing profits.
“Our platform helps shift that back towards dining, which should be the first priority of the restaurant and once they’ve got that right delivery can be the cream on top,” Mr Koutlakis said.
EatClub scored a major coup two years ago when Mr Koutlakis and co-founder Ben Tyler, a former ANZ executive, convinced Marco Pierre White, known as “the godfather of modern cooking”, to come on board.
Mr White now has a 5 per cent equity stake in EatClub, according to ASIC records, alongside Mr Tyler, Corporate Travel Management co-founder Matt Cantelo, Mr Berger and Mr Besser.
Mr White says many good restaurants don’t survive because they can’t afford to market themselves and, with high fixed costs, struggle to break even on week days and nights when tables are empty.
“In the restaurant business you make hay when the sun shines and the sun tends to shine on a Friday and Saturday evening,” he said.
“When I look at my restaurants we want to get to break even by Thursday, and Friday and Saturday is when we make our money.
“What we’ve created is a marketing vehicle [for restaurants] and an opportunity [for diners] to get a good deal.”
Unlike traditional restaurant deal programs that force restaurants to commit to offers in advance, EatClub’s dynamic pricing technology enables restaurateurs who find themselves with empty tables to offer last-minute discounts ranging from 20 per cent to 50 per cent on one or a number of tables.
The restaurant pays a “cover charge” of $2 per diner, a fraction of the price of the meal and well below the 35 to 40 per cent commission or service fees now levied by Uber Eats, Deliveroo and Foodora.
One Melbourne restaurant uses EatClub to offer deep discounts at 5pm and seats early diners near the windows to create energy and attract walk-in customers.
“It really works for the vast majority of restaurants and we’re expanding as fast as we can,” Mr Tyler said.
EatClub recently raised $1.2 million, valuing the company at more than $5 million, and is ramping up expansion plans after receiving approaches from crowd funders, private investors and potential partners and licensees.
“We could break even relatively earlier, even this year,” said Mr Tyler, “but if we decide we want to continue ramping up growth the break even point won’t be until later.”