Delivery like a G: Menulog challenged by Australia’s labour shortage

“It’s been extremely transformative. And if I’m honest, probably a bit of a wild ride,” he told Inside Retail of trading during the pandemic. 

“We’ve seen enormous growth in our business. The flip side is that for the restaurant industry, there’s been a much more mixed bag. Delivery has been a blessing and something that has really helped a substantial amount of businesses survive through [the lockdown] period.”

CBDs hit hard, but country towns thrive

Murphy admits that CBD restaurants felt the brunt of lockdowns, as office workers returned to the suburbs to work from home, but said it was good news for regional areas. 

“We saw very significant growth for many of the suburban and regional areas. Country towns have been growing at a very rapid rate,” he said. 

Although the business was snapped up by British food delivery service Just Eat in 2015, Murphy said Menulog holds its Australian heritage close and considers it to be at the heart of its relationships with restaurants.

Menulog’s partnership with self-delivery restaurants continues to be “a very substantial and strong business” but it also has a full service logistics arm, similar to what major competitors UberEats and Deliveroo offer.

“There’s still a substantial number of [restaurants] that prefer to [deliver] themselves. They have lower economics, different models [etc.],” he explained.  

“We are able to cover more territory than our competitors because we can operate, in country towns for example, where we’re not running our delivery service and still have excellent trading relationships with self-delivery venues across the country. 

“We’ve also got click-and-collect. It’s a more multifaceted business than the competitors from a functional perspective.”

Growth in grocery

Like its competitors, Menulog took advantage of increased demand for grocery delivery during the last 12-18 months.

“The grocery and convenience food sector has been one of the biggest areas of growth, from a trends perspective, that we’ve seen over the past 12 months. That general category on Menulog is up in the mid-300 per cent growth range,” Murphy said. 

Menulog has over 1600 grocery and convenience retail outlets on the platform, including major national partners like BP, as well as independent grocers and convenience retailers. 

And while rival UberEats moves into package delivery, Menulog plans to stay focused on food retail.

“We’re not interested in jumping categories into general last mile delivery services,” Murphy said. 

When it comes to restaurant deliveries, it’s no longer just about dinner time. Menulog is seeing growth in the breakfast, lunch, and late night segments as people continue to work from home. 

“We don’t expect that to change,” he said. “We expect Australia to continue to mature as a home-delivered food market, and we think that the industry still has a substantial amount of headroom.

“Equally, we are rational enough to expect that there’ll be some normalisation of some of the buying habits and behaviours of the last couple of years.”

‘Did somebody say Menulog?’

With Menulog servicing 93 per cent of the addressable population in Australia, suburban families have proven to be the brand’s heartland clientele. But a company rebrand last year, featuring none other than rapper Snoop Dogg and a very catchy campaign jingle, has helped the business attract a much younger demographic.

“It was very impactful for us, both in terms of the Snoop campaign and the recognition of the song and the slogan that accompanied that campaign,” Murphy said. 

“It allowed us to talk to segments of the market where we were previously underrepresented. The campaign activity has taken us into a landscape where we are doing a significant amount more trading with younger audiences and inner city audiences.”

In recent weeks, the brand began rolling out a new iteration of the campaign, partnering with music label Mushroom Records to invite four local Australian artists to share their interpretation of the now iconic jingle.

“That’s been a great evolution,” Murphy said. “We love that particular flavour of the campaign because it has allowed us to support local restaurants, the local record industry and young artists.” 

Labour shortage impacts delivery and hospitality

Almost two years into the pandemic, Murphy said Australia’s labour shortage is proving to be a major challenge, not just for delivery services, but for the hospitality industry as a whole. 

“There is definitely a labor shortage across the industry. We see, from a Menulog perspective, that manifests in terms of overall career availability,” he said. 

“The restaurant community is wrestling with the same challenge [of sourcing] hospitality staff. That’s the reality of having borders shut for such a lengthy period of time.” 

But he is confident in the resilience of the hospitality industry, and believes that, with the right support, it will bounce back. 

“I’ve been in the business for five-and-a-half years now and have been fortunate enough to spend time with hundreds, if not thousands, of small restaurants across the country. It’s a very entrepreneurial sector. It is extremely impressive the way that it has capacity for self renewal,” he said. 

Today, Menulog has 37,000 restaurant partners across Australia and New Zealand, and Murphy plans to grow that number significantly next year. 

“We’ve got a number of conversations happening at the moment with vendors in that space that we will continue to add to our supply mix and our platform,” he said.