Quantfury Daily Gazette
Fast food, getting faster and faster
Technological advances are reaching all industries, even the least thought of, such as the gastronomic industry, helping from different angles, with tools to enhance the image of restaurants in social networks, to logistics to try to reduce costs as much as possible. In this innovation process, the main objective is to benefit users, and this series of changes will have as protagonists only those companies that can adapt quickly to new trends.
Large restaurants or fast food services have a large capacity for their diners, and one might think that this is one of the most important parts of this business, but recent years have shown us that this is no longer the case. The competition is now played in a different field, logistics. This is why it is beginning to be important not only for the capacity of a restaurant but also the space allocated to the “kitchens,” the place where the food is prepared because a large percentage of it will not be consumed there but will be taken to the diners’ homes.
Large restaurant chains or franchises must face this new challenge in the coming years. Companies like McDonald’s (NYSE: MCD) or Yum Brands (NYSE: YUM), which have thousands of locations around the world, have been working with home delivery for several years, but the 2020 health event put this system at maximum capacity and consequently people got used to the “take away” service, the delivery of groceries to their home or office. The convenience of the home office left us the habit of waiting at home for our favourite food, allowing us the pleasure of enjoying what we like to eat effortlessly and in the comfort of home.
Currently, restaurant chains must adjust to the new trend, the delivery in time and form of orders placed through mobile applications or the Internet. And this is where the most interesting competition begins; well-known companies like McDonald’s (NYSE: MCD) are directly facing companies like Uber (NYSE: UBER) that are strongly developing Uber Eats, a food delivery service. The paradigm shift toward these services over the past two years has served as a catalyst for new business models.
The pandemic has changed the gastronomic model forever; large spaces for dozens of diners have been put on the back burner, and takeaway is here to stay, not only for large chain restaurants but also for those just starting out.
Since 2018, Amazon (NASDAQ: AMZN) has been dabbling in meal delivery, but this year the service has expanded, first starting in the Eurozone (UK), where the exclusivity contract was with London-based Deliveroo (LON: ROO) and more recently in North America, with GrubHub. If we approach the “take away” service as a logistics-based model, the incursion of a company like Amazon into this dynamic increases the likelihood of success for everyone. The e-commerce company enters the food market with a different approach, offering free delivery service to premium users of its platform, “Amazon Prime,” together with the company GrubHub, which owns Just Eat Takeaway.com (AMS: TKWY). This would allow an additional service to Amazon users and a massive influx of potential users to GrubHub’s platform. Perhaps this is a good example of a win-win.
It is interesting to see how the delegation of tasks creates explosive formulas in any industry since Amazon (NASDAQ: AMZN) is a reference in logistics, but not in food; anyway, if it manages to coordinate companies in new regions, the “take away” service that they provide to their premium users, could expand worldwide.
This industry is becoming more dynamic as people choose to optimize their time and make use of these services. This could have an impact on real estate as large restaurants take a back seat, but it will also bring great benefits for users, better prices, and even the ability to order their favourite food anywhere and have it delivered. The ease that this system offers is even important for those who have a specific diet in their day to day, these are just some of the many advantages, but all are important when it comes to achieving extra competitiveness.
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