Just Eat ramps up services to the restaurant trade and vows to drive down costs

Robin Clark spends quite a few of his Sundays attending food awards. Pizza awards, Turkish kebab awards, Bangladeshi catering awards — if the cuisine can be found in the UK then there’s usually a programme to honour it.

But there’s a very good reason he endeavours to attend as many of these events as he can — as business partnerships director at Just Eat, the food delivery platform, his role is intrinsically linked to knowing the businesses it serves, understanding the issues they face and, increasingly, providing them with services that improve their profitability.

Just Eat, along with a handful of its competitors that play in the same space, has grown to become an integral cog in the foodservice wheel over the last few years, as the numbers confirm.

“The industry we work in, particularly in the UK, is a fascinating one,” said Clark at the annual CESA Conference. “The takeaway industry is worth circa £6 billion and if you include collection-only we are looking at close to £10 billion. And of that £10 billion, north of £1.5 billion is going through the Just Eat platform every year.”

To put that into further perspective, the company is running about two million orders every week and while those are still heavily concentrated around the weekend, it claims to be seeing “massive” trade throughout the rest of the week. In the UK it works with 28,000 different restaurants and 65,000 across the globe.

“The scale of it is interesting,” he says. “If you put it into the context of a shopping centre at the weekend, we are worth about three Westfield Shopping Centres on the platform every week.”

There are 28,000 restaurants on our platform doing £2 billion a year. What business wouldn’t be interested in having a conversation?”

Clark admits that consumer trends, particularly the huge appetite for choice, have developed in a way it could never have envisaged a few years ago. As far as it is concerned, the more restaurants on its platform the better.

“The average customer is probably buying 10 times a year and they’re shopping across multiple cuisines, so having all of the different cuisines on that platform at any one time is absolutely key. But now, as we start to engage with the branded restaurant groups, like KFC or Pizza Express or Burger King, the opportunity for larger brands and their halo effect onto the smaller takeaways has been amazing. The advent of companies like KFC on the platform has actually been a bonus for the other takeaways because they are seeing more customers that didn’t used to be on the platform.”

Its data backs up the demand for more eclectic cuisine. Orders for Mediterranean, Caribbean and Greek food saw a massive uplift last year, while “unlikely” candidates such as breakfast and desserts also exceeded expectations. The most popular dishes on the platform still remain Chinese, Indian and Italian, however.

Just Eat revenue growth

The other major change that Just Eat has witnessed over the last couple of years has been the shift towards mobile. “Over 70% of our orders are now made on a mobile platform, which is a massive change,” says Clark. “If you look back just a couple of years ago, we were north of 70% on desktops and laptops. So optimising that and making sure that our platform is absolutely spot-on for a mobile experience is really important.”

Just Eat’s vision extends far beyond being just a takeaway delivery outfit. Its corporate ambition is to create “the world’s greatest food community”, which ultimately equates to providing customers with access to quality food from every single segment, whenever they want it and wherever they want it. But it is also just as obsessed with making sure it is the consummate business partner for the restaurants on its platform by supporting them with marketing, technology and cost efficiencies.

Clark joined the business 18 months ago having previously worked in the mass retail segment for the likes of Tesco and Marks & Spencer. His remit from the outset was to set up a Restaurant Services division and find ways of helping restaurants save money by exploiting economies of scale on their collective behalf. “There are 28,000 restaurants on our platform doing £2 billion worth of food and drink. What business wouldn’t be interested in having a conversation to see how we can help both sides?” says Clark.

Over the course of 2018 we will also be exploring how we do something in the kitchen equipment space”

Using what he describes as a “fairly disciplined logic” of scrutinising typical restaurant P&L and making sure it focused on the services and products most relevant to restaurants first, Just Eat has devised a series of offers and packages exclusive to its restaurant partners. This includes a cash rebate system for restaurants ordering through food wholesaler Booker, agreements with FMCG companies, a partnership with Global Payments for card transactions and free utility saving advice from self-styled saving experts MakeIt Cheaper.com.

“Restaurants love it, and we love it because it’s helping our restaurants, there’s nothing in it for us. This is not about a revenue stream for Just Eat. We have a very simple revenue model, 14% on every order, but we’re helping our restaurants to save. If you think about the top three deals — food, card payments and energy — we know that from the data we have got already restaurants will save over 60% of the commission that they pay to Just Eat.”

The next landmark as far as centralised deals go is actually looking likely to be catering equipment. It recently surveyed more than a thousand restaurants on what services they would like to see next and kitchen hardware came out on top. Speaking at the annual CESA Conference, Clark revealed that conversations with different catering equipment manufacturers were already underway.

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“I think the focus for us is to drive the top three services at the moment — card transactions, utilities and food — but over the course of 2018 we will also be exploring how we do something in this space. The average restaurant probably spends about £40,000 to £50,000 to set up the equipment in their kitchen. And if you think about the replacement cycle, perhaps once every nine or 10 years, then if you do the maths — and people have told tell me this might be right or wrong — but maybe it’s about a £300m market with our restaurants.”

It’s clear that Just Eat is more than just a high-end delivery service. As its restaurant network expands, it is inevitable that catering equipment won’t be the only area in which it looks to achieve savings in a bid to keep its partners loyal and profitable.

Takeaway stat attack

– Spending on takeaways across the UK supports 231,350 jobs, with 41,000 new jobs created since 2009.
– The public spent £9.9 billion on takeaways in 2016.

– Spending on takeaways is predicted to grow to £11.2 billion by 2021. This is expected to create 30,000 new jobs in the sector.

– Spending habits and tastes vary across the UK, with London and the South East the biggest takeaway markets, spending £2.7 billion, followed by the North West on £1.1 billion.

– 33% of takeaways say they are experiencing skills shortages, particularly for chefs, front-of-house staff and delivery drivers.

– 37% believe the UK’s decision to leave the EU will make it harder to recruit staff for their business, while 29% say they need to recruit skilled labour from outside the EU.

– Almost 35,000 establishments now use online apps and nearly three-quarters (72%) of takeaways surveyed say these have been positive for their business.

Source: The Takeaway Economy Report

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