A new partnership between Greggs and Just Eat will prevent rivals in the delivery field like Uber Eats and Deliveroo from offering the British bakery chain’s sausage rolls across the U.K., according to the Financial Times.
Restaurant groups are reassessing their work in the blossoming field. Exclusive partnerships as such have been a method for large chains to try out partnerships with food delivery sources.
Deliveroo and Uber Eats were among the first to begin providing delivery logistics to restaurants that didn’t have their own delivery partnerships.
Greggs, one of the U.K.’s most popular fast food groups, was a nice catch for Just Eat, which meanwhile just closed a deal to merge with Takeaway.com for 6 billion pounds ($7.8 million).
Greggs Finance Director Richard Hutton said Just Eat seemed to be the best candidate to partner with, due to the locations where Gregg’s already operates.
Greggs has revised its profits guidance five times since the beginning of 2019, with the success of its vegan sausage roll as well as its foray into pizza and other hot food. The partnership with Just Eat comes at the same time as the expiration of McDonalds’ exclusive partnership with Uber Eats. The introduction of new competition could disrupt Uber’s influence in the market.
One person who works in the industry told FT that Uber would suffer a “big blow” from the timing and could lose as much as 20 percent of its sales to Deliveroo.
Another reason Greggs ended up choosing to partner with Just Eat is the cost of delivery; Just Eat has committed to a 1.50 pound ($1.96) charge, the lowest on the market.
Hutton said the agreement with Just Eat might not necessarily be permanent.
Restaurants have often bristled at working with new delivery apps, many describing them as a necessary evil. Some, like PizzaExpress, tried to make their own delivery team. But the company ended up striking a deal with Deliveroo instead.