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Gregg Wall

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1:00 am, August 18, 2008
Meal delivery service dishes up good growth

City Servants says more people are ordering in rather than going out

By Simon Binns

A Manchester-based firm that delivers restaurant meals to apartments in the city centre says it is defying the financial downturn and looking to franchise its business across the UK.

City Servants, based on Ducie Street, has been in business eight years and has 10 restaurants as clients.

Director Gregg Wall said a positive trading year — during which turnover reached around £500,000 — had led to the decision to expand.

“We want to start franchising the business out it in the next eight months,” he said.

“We feel it is a good model — we do around 250 orders a week at an average of £40 — and it is scalable enough to operate in between 20 and 30 cities around the country. We've not finalised how much it will cost franchisees yet, but we are looking at how we'll market the business.”

Wall said the firm, which charges £3.75 for a delivery and distributes 16,000 menus around Manchester city centre and Salford Quays, was trading well as people were still prepared to order restaurant food to eat at home, but wanted to cut down on the additional expenses of a night out.

“People are feeling the pinch, so they aren't going out as much, but they still want to eat restaurant food,” he said. “If they spend £40 with us, they can have a meal and a bottle of wine but there's no taxi fare or additional drinks that a night out in the city centre might involve.

“The most important thing for us is that a restaurant can get the orders out quickly — it needs to be cooked within 20 minutes of us placing an order, otherwise we'll be late for the customer. The quality of food is important too. We've found out which restaurants are good and bad over the years and have probably worked with more than 30. We generally give each restaurant a four month trial and then we can see how it's working out.”

Wall said the growing number of rentals in the city centre was helping trade, along with the growth of Manchester's serviced apartments sector.

“The empty flats bought by investors a year or so ago are starting to fill up a bit,” he said. “More renters mean more potential business for us, and it also keeps customer turnover fresh. Serviced apartments is another growth sector for us. Because they can't offer food, we have managed to become preferred supplier to some operators.”

Others have not found it as easy to make the business model work, however. One rival firm has decided to get out of the food delivery business because of its “risky” nature.

Mark Leach, owner of Trafford-based Tadtu, which also delivered food and drink to city centre apartments, now delivers free lifestyle magazines to residential apartments instead.

“The restaurants were letting us down a bit, getting orders wrong or being late,” said Leach. “Customers were ringing us up to complain.

“The business was making money but I was working Friday and Saturday nights and I wanted to get my life back.

“Everything was done on a verbal contract and although restaurants would give us discounts on the food and we were seeing decent margins, our customers were a lower priority than people actually dining in the restaurant.

“At the end of the day, delivering magazines is making us far more money than delivering food ever did.”



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