Tech solutions in catering industry: threat or opportunity?
More and more restaurants have solvency issues in the US. The US-based BankUnited draws attention to a phenomena, which may affect restaurants all over the world.
According to the article published on pymnts.com based on the report of American Banker, BankUnited CEO Rajinder Singh warned that unlike other industries in its small business loan portfolio, such as businesses in the fitness market and other franchises, restaurant debt is strained.
– There is a lot of delivery happening – he said during the bank’s recent fourth-quarter earnings call – And when delivery happens, often the revenue model gets impacted because you’re not ordering some of the higher-priced stuff. That change that is happening in the business mode, coupled with tight labor markets … is putting pressure on the financials of our borrowers.
As the use of on-demand delivery services like Uber Eats and DoorDash rises, fewer consumers are visiting restaurants and ordering items that are more profitable for those businesses, like drinks and desserts, he said.
BankUnited holds $360 million in its restaurant portfolio, reports said, with executives noting that some of those loans recently moved to criticized or classified status during Q4.
The impact of on-demand food delivery on the restaurant industry and its cash flow management could continue as more industry players enter the market, though there is consolidation ahead from players including Takeaway.com and Just Eat.