Amazon Discontinues Its Restaurant Delivery Service

By the end of this month, Amazon Restaurants will be no more. First developed in 2015 as an Amazon Prime perk, the food delivery service was designed to compete with the likes of Uber Eats, Seamless, Postmates, and DoorDash. Current Amazon Restaurant employees have been moved to other roles within the company or will be supported in the process of securing employment elsewhere.

Analysts have been quick to note Amazon’s recent $575 million investment in the British food delivery service Deliveroo in May. During its four year run, Amazon Restaurants expanded from its hometown Seattle to more than 20 U.S. cities and briefly entered the U.K. market before closing the latter development in 2018. Deliveroo has successfully expanded to a number of countries including France, Germany, Spain, Australia, and Hong Kong.

With over 91 million monthly active users, Uber Eats is poised to take the lead in on-demand delivery. Like Amazon Restaurants, Uber Eats was established in 2015 — unlike Amazon Restaurants, it has continuously grown since its launch. Uber Eats currently services over 20 countries, in part thanks to its lucrative partnership with McDonald’s.

And the delivery platform will continue to be a threat to Amazon: Uber Eats intends to add grocery delivery options, putting AmazonFresh on the defense. AmazonFresh has been around since 2007, but its growth has been slow. In recent years, the company has abruptly dropped service in multiple U.S. states. The Uber grocery development team is already in the works, and will likely be based out of Toronto.

Despite its success, Uber Eats has struggled to establish a consumer-friendly fee structure. The structure was recently updated in March to address these concerns, but the update appears to be more confusing than the original design. Fees now vary depending on your location and courier availability, and a 15 percent service fee is applied to the subtotal of all orders. In The Barron Report episode below, host Paul Barron unpacks the new Uber Eats fee structure and predicts what may be ahead for the growing company.

Have Amazon Go and UberEats Become a Threat to Restaurant Operators?

Operators have always had to compete in the market with other concepts, but in today's market, there are a new set of power players ready to steal your customers.

Enter Amazon.

Amazon, like the fast casual segment, is catering to the on-the-go consumer with its cashier-less Amazon Go stores, many of which offer grab-and-go food options. These stores have become the most popular during the workweek, especially at lunchtime.

We recently analyzed the aggressive move Amazon is making in the foodservice industry. Listen to this episode of The Barron Report for more insights on if fast casual restaurants can survive this threat.

But there is one advantage that restaurants, namely fast casual restaurants, have over the Amazon Go stores– many have embraced the plant-based movement. According to Foodable Labs data, today's foodies can't get enough of these plant-based menu items.

Don’t miss our video breaking down this data about the plant-based movement below.

Amazon isn't the only threat operators need to be worried about. There is another shark circling to take a bite out of your business.

Third-party delivery services emerged as a solution that many operators desperately needed.

Since offering delivery has quickly become a guests' expectation, an operator has two options. One is to invest in significant funding to build a delivery program. However, this is easier said than done. It entails creating a system, investing in a platform to process these orders, hiring more staff to handle take-out and delivery orders, and then hiring reliable drivers to deliver these orders.

Or an operator can simply partner with a third-party delivery service, which eliminates most of the headaches. When you consider the operational and logistical challenges of offering delivery, its no wonder that operators across the country have decided to go the route of partnering with a third-party delivery service.

But now this has created a new problem.

One of the most popular delivery services out there is now UberEats. This company has quickly conquered the market. UberEats is currently offering food delivery for 50 percent of the U.S. population and has the lofty goal of serving 70 percent of the U.S. population by the end of this year.

As UberEats becomes more popular, the more the fees increase for the participating restaurants. Could this be correlated to the increase in restaurant closings?

Listen to the podcast above as The Barron Report host Paul Barron explains the data showing that third-party delivery growth may be tied to restaurant failures.

Amazon Go to Threaten 70 Billion Fast Casual Segment

On this episode of The Barron Report, Paul Barron analyzes the aggressive move Amazon in making in the foodservice industry.

Amazon plans to open up to 3,000 of its cashier-less Amazon Go convenience stores by the year 2021, according to a recent report from Bloomberg. The tech giant's brick-and-mortar concept Amazon Go currently has three stores open, two in Seattle and one in Chicago.

Jeff Bezos, Chief Executive Officer of Amazon, views eliminating meal-time rushes in busy cities, like Seattle and Chicago, as the best way for Amazon to reinvent the brick-and-mortar retail experience. The concept of a convenience store that sells fresh grab and go foods and a limited grocery selection like the 7-Eleven franchises, for people in a rush poses a threat to meal-kits and fast casual chains alike.

Listen to this episode of The Barron Report for more insights on how Amazon will be continuing to impact the foodservice industry and if fast casual restaurants can survive this threat.

SHOW NOTES

  • 11:52 - A Look at Amazon Prime Statistics

  • 14:36 - What’s Next? Predictions for Amazon and the Food Service Industry

  • 16:39 - Will Fast Casual Survive?

  • 18:59 - Positioning Your Business to Create a Loyal Guest

  • 01:20 - Amazon’s Disruption in the Retail Industry with Amazon Prime

  • 02:54 - Amazon Go Store Strategy: Are They After Fast Casual?

  • 05:34 - What about Whole Foods?

  • 07:16 - Amazon’s Impact on the Food Ecosystem and Fast Casual

  • 08:44 - Amazon’s Capability to Connect to the Guest


 
 

Also check out the video below to watch a recent episode of The Barron Report to learn more about the Amazon Go stores and how these cashier-less stores are changing these retail space forever.

Are Some Amazon Employees Accepting Bribes From Merchants?

Amazon seller

The tech giant Amazon is investigating if independent merchants using the platform are bribing Amazon staff members in exchange for data, according to a recent report from the "Wall Street Journal."

"In exchange for payments ranging from roughly $80 to more than $2,000, brokers for Amazon employees in Shenzhen are offering internal sales metrics and reviewers’ email addresses, as well as a service to delete negative reviews and restore banned Amazon accounts, the people said," writes "The WSJ."

The illegal practice is primarily occurring in China due to the large number of sellers in the country. Also since Amazon's Chinese employees get paid smaller salaries, they are more likely to accept kickbacks.

With the help of third-party brokers, the employees are recruited on apps like WeChat where they are offered deals like for $1500, the employee will delete at least five negative reviews.

Other deals include in exchange for a monetary amount, the merchant will be given the mail addresses of reviewers or the Amazon employee will restore a ban on an account.

However, Amazon is looking into the illegal activity.

"Amazon has flagged a number of cases involving its employees—at least a few of whom are in the U.S.—as well as “shuffled the roles of key executives in China” to stop the misconduct, the paper added," writes "Gizmodo."

Amazon also told "The WSJ" that it holds its "employees to a high ethical standard and anyone in violation of our Code faces discipline, including termination and potential legal and criminal penalties."

Learn more about Amazon's investigation into if staff members are accepting kickbacks for favors at "Gizmodo" now.

Over the last year, Amazon has shown no signs of slowing down though. Watch the video below to see Paul Barron crunch the numbers to predict the impact of Amazon’s acquisition of Whole Foods.

Grocery Ecommerce on the Rise: Food Retailers and Tech Giants are Teaming Up

Grocery Ecommerce on the Rise: Food Retailers and Tech Giants are Teaming Up

French multinational retailer Carrefour just announced they will be partnering with Google. This makes Carrefour the first retailer in France to partner with Google and bring consumers a new online grocery shopping experience.

This is just the most recent in a slew of partnerships between traditional food retailers and tech companies as grocery ecommerce continues to ascend.

Let’s face it, we’re living in a time where everything is focused on convenience making online grocery shopping a perfect fit. But just how large is the grocery ecommerce market?

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