Just Eat (JE.) has become McDonald’s (US:MCD) second delivery partner in the UK and Ireland, joining Uber Eats in facilitating ordering and delivery through its platform.
Midway through this month, Just Eat revealed that it had signed an exclusive deal with Greggs (GRG) to provide ordering and deliveries. The two groups had been conducting a trial in London, Newcastle and Glasgow, and now plan to expand to Bristol, Birmingham, Leeds, Sheffield and Nottingham.
The latest announcement is a bloody nose for Uber Eats, introducing competition where previously it was the exclusive provider of the fast-food giant’s delivery service. McDonald's UK offers delivery in 950 of its locations, and its chief executive said in October last year that delivery accounted for more than 10 per cent of sales.
The positive news is welcome. Just Eat’s attempts to merge with Takeaway.com were frustrated earlier in January, when the Competition and Markets Authority said it was investigating the deal. Takeaway.com’s management said its offer for Just Eat would become unconditional on 31 January, a week later than previously expected.
The CMA’s action took the market by surprise; while the deal was first announced in July last year, the investigation was not announced until the day before the expected completion.
At the time, shares in Just Eat fell 3 per cent as the perceived risk of the deal being blocked increased, although analysts at Barclays said the most likely scenario was that “this gets approved quickly and Takeaway.com can proceed with integration”. Takeaway.com said it understands the investigation will look at whether it would have re-entered the UK market had the Just Eat transaction not happened. It added that its UK business only had revenues of £76,000 in 2016, the year it was closed.
“Takeaway.com and its advisers will work with the CMA to respond to any questions it may have and is confident that merger clearance will be obtained,” the group said.
Just Eat is not the only company in the CMA’s crosshairs. In late December the regulator referred tech giant Amazon’s (US:AMZN) acquisition of a minority stake in online food delivery platform Deliveroo for an in-depth investigation. The CMA has said it is concerned the investment could discourage Amazon from re-entering the UK food delivery market – which it exited in 2018 – and damage competition in online grocery delivery.
