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.

Leaked Whole Foods Email Reveals the Truth About Amazon's $15 an Hour Bump and Not All Workers are so Happy About it

Outside of Whole Foods

Amazon made a shocking announcement last week that it would pay its workers in its warehouses and at its grocery chain Whole Foods at least a minimum of $15 an hour.

Effective on November 1st, all full-time, part-time, and seasonal workers for the E-commerce giant will be given the increased wage–some of which were making $11 an hour.

Then this week, an internal email by Whole Foods CEO John Mackey that was sent to Whole Foods employees was leaked. The email outlines how the company will be implementing these raises at the grocery chain.

"According to Mackey, workers making $14 or more currently will be bumped up by $1, while Team Leaders in the same situation will receive a $2 increase. While Amazon scores points for backing a progressive minimum wage hike, veterans of the company are the ones feeling shafted," writes "Gizmodo."

Although supporters of higher minimum wage were quick to celebrate Amazon's announcement, some workers are disappointed that they are only getting a slight bump while others who have just joined the company are making close to their hourly salary without earning it.

“This means that I will make only a dollar more than new team members and I’ve been promoted 5 times while being here almost 6 years,” said a current Whole Foods employee to "Gizmodo" in an email. “I’d like to hear from John Mackey why my years of work and dedication under their constant missteps is worth only a dollar more than a new team member.”

Besides that, some warehouse workers aren't pleased with the pay bump either because the company is no longer giving out stock grants and monthly bonuses, according to a recent "New York Times" report.

"Yes, Amazon is increasing wages, which will benefit most employees. But it will no longer give out new stock grants and monthly bonuses. Some workers believe that means their total compensation will shrink," writes the "New York Times."

On September 12, Mackey announced that the company would be returning stock benefits for Whole Foods workers. He briefly addressed this in the leaked email.

"Keeping with the commitment I communicated in my last letter, we will offer a one-time restricted stock unit (RSU) grant to all Team Members with over 6,000 service hours who have not yet received any RSUs. We will provide more details in the coming weeks," wrote Mackey.

Read the full letter at "Gizmodo" now.

After Amazon acquired Whole Foods last year, the company made some big changes. First, it slashed the prices at the high-end grocery store. Watch the video below to learn more.

Female-Led Funding Startup, AccelFoods Helps Other Food-Focused Startups like Soozy's Thrive

Ever wondered how grocery stores will look like five years from now?

This is something Jordan Gaspar, co-founder of AccelFoods, thinks about daily.

AccelFoods is a funding startup that invests in other startups that have the potential of disrupting food categories in the grocery aisles and beyond through their innovative products.

On this episode of The Barron Report, our host Paul Barron speaks with Gaspar and Susan Chen, CEO of Soozy’s, a frozen, gluten-free baked good product company that has partnered with AccelFoods in order to grow its business. The three discuss how the relationship has been between the venture capitalist group and the investee, Soozy’s role in its snacking category, what types of companies AccelFoods seeks to invest on, and trends in the marketplace among other topics.

Listen above to learn more about these trailblazing companies!


Show Notes:

  • 01:43 - Purpose of AccelFoods

  • 03:48 - Soozy’s Role in the Frozen Food Segment

  • 05:47 - AccelFoods’ Investment in Soozy’s

  • 09:26 - Types of Companies AccelFoods Invests In

  • 10:47 - Trends In The Marketplace

  • 14:38 - Soozy’s Differentiator in Snacking Category

  • 17:52 - Product Packaging

  • 23:16 - Size of Companies AccelFoods Invests In

  • 26:09 - Macro Understanding of Food Industry

  • 28:00 - Impact of Social Media for Soozy’s

  • 29:58 - Future Growth Plans for Soozy’s

  • 31:52 - Challenges in Male-Dominated Venture Capitalist World

 
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Walmart Vs. Amazon's Whole Foods: Find Out Which Company is Winning the Grocery Wars

Walmart Vs. Amazon's Whole Foods: Find Out Which Company is Winning the Grocery Wars

While headlines about Amazon's Whole Foods continue to blanket the media, Walmart is so far winning the battle for grocery customers. 

The retail giant has announced that in this last quarter, its grocery sales have been the best they have been in nine years. 

Currently, Walmart has a share of $800 billion in the U.S. grocery market and collects 25 cents of every dollar spent, as reported by "Euromonitor."

Walmart's affordable grocery items, paired with digital conveniences like online grocery ordering and the curbside pickup has helped to foster massive sales growth for the retailer. 

Specifically, Walmart's online food ordering is available at over 1,800 stores and the retailer has plans to expand this services to about 40 percent of the nation by the end of the year. 

Amazon's Whole Foods grocery business sales, on the other hand, aren't even close to Walmart's.

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Grocery Chain Aldi is Going Healthier to Compete with Whole Foods

Grocery Chain Aldi is Going Healthier to Compete with Whole Foods

Aldi, the discount supermarket, is making some big changes to compete with Whole Foods and other organic grocery store chains. 

As consumers gravitate to a healthier lifestyle, the more they visit natural food grocery stores. 

Since Aldi has aggressive growth plans and the grocery sector is especially competitive following Amazon's acquisition of Whole Foods, the German grocer is making a play to expand its natural and fresh food selection by 40 percent.

Aldi, which is the eighth biggest retailer in the world, has plans to open 700 new stores in the U.S. and is aiming to remodel 1,300 existing stores over the next four years– which will cost the company roughly $5 billion. 

So should Whole Foods be nervous? Diane Sheehan, an analyst with Kantar Consulting, thinks so. 

"Those retailers continue to be underestimating Aldi and are doing it to their own detriment," said Sheehan to "CNN Money."

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