Amazon/Deliveroo platform will ‘substantially decimate margins’

By Finn Scott-Delany

- Last updated on GMT

Amazon/Deliveroo platform will ‘substantially decimate margins’

Related tags: Deliveroo

Deliveroo have been a major part of the destruction of the restaurant industry and demise of the high street, All Our Bars CEO Paul Wigham has said.

Criticising Deliveroo’s fees, Wigham warned Deliveroo was taking revenue from bricks and mortar business in much the same way as Amazon has done with high street retail.

His comments were part of representations to the Competition and Markets Authority (CMA) against Amazon’s bail-out of Deliveroo.

Wigham said: “If they have issues with finance, then they should take the routes that bricks and mortar retailers have had to take and you should not allow Amazon to take dominance in one of the last areas where they do not pervade.”

Domino’s also made representations against the investment, saying it would result in a “substantial lessening of competition”.

The pizza company argues the CMA has taken a short term view unduly influenced by Covid-19 that Deliveroo would go out of business without investment.

Domino’s said the transaction would give Deliveroo with an unfair advantage against which small and independent businesses would struggle to compete.

It will allow enable Deliveroo to continue its loss-making expansion strategy, supported by Amazon’s substantial financial reserves, creating an unfair playing field, and driving small and independent food businesses out of the market – “unless they agree to become captive members of the Deliveroo platform, thereby squeezing already thin profit margins”.

The cost of participating in an Amazon/Deliveroo dominant platform is likely to “substantially decimate the margins of QSR businesses”, Domino’s writes.

Once Amazon and Deliveroo control an essential route to market in food delivery, nothing would stop them “raising commissions for partners and deteriorating quality to customers in the future.”

Related topics: Business & Legislation

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