The food delivery industry is growing so much it’s getting congested and crowded.
This week, Just Eat, the U.K.’s largest restaurant food delivery service, saw its numbers get curtailed at the end of the year. The slower growth, according to analysts, is due to more competition in the industry.
The like-for-like number of orders rose 36 percent over the entire 2016 year, which is less than the 38 percent gain that the company reported months ago reflecting on the first nine months of the year. The company, which went public in 2014, showed that shares dropped nearly 7 percent, which is the most significant drop in more than seven months.
That said, Just Eat Chief Executive Officer David Buttress isn’t daunted. He said that the order growth “puts us in a strong position to deliver full-year results in line with our previous financial guidance.”
The crowded market for food delivery services has created — ironically — some cannibalism, according to experts. Last month, Just Eat slurped up two of its competitors in a combined £266.1 million meal. One was Berlin-based Delivery Hero, which sold the U.K. branch of its business — called hungryhouse — to Just Eat for £200 million. The second course was Canadian delivery startup SkipTheDishes for £66.1 million. Since 2015, Just Eat has also gobbled up businesses in Australia and Mexico.
But the competition is fierce, even if cannibalism isn’t an option. Amazon opened its delivery service in London this fall to join the competition along with Uber and Deliveroo, the latter of which recently announced a focus on corporate accounts. Uber also announced that it is partnering with McDonald’s in certain Florida markets for a new food delivery partnership with UberEATS. Some 200 stores in the region will reportedly offer delivery options during the trial run.
And then, there is the AI element that is growing. Earlier this week, Amazon announced its integration of Alexa’s functionality into Amazon Restaurants, the food delivery service side of Prime Now. Prime members can voice-order their next meal through their Alexa-enabled devices. Prime members can ask Alexa to reorder past meals from Amazon Restaurants on their Echo or Echo Dot devices by issuing a voice command composed of a participating restaurant’s name or a cuisine type. Alexa will then pull up the user’s order history and list the meal options available for reorder.