Merchants Rebel Against Creeping Fees
Swiggy Insights, UPS pilots fly off, Aldi vs Lidl
Whoo - it’s another scorcher out there! If you’re getting delivery, don’t forget your tip should equal the day’s high (that’s in Fahrenheit, not Celsius, you cheapskates.) 😉 Stay cool with some good news from Toast and Swiggy, data on UPS, and a deep dive into two warring grocery giants.
Today:
Toast, Clover Give Up on Fee Increases
Swiggy Offers Network Expansion Insights
Chart Time | UPS Pilots Show Solidarity
Lidl & Aldi Deliver Different Results
POS | Toast Rolls Back 99 Cent Fee Increase
Less than a month after announcing it was adding a 99 cent fee to all online orders it processed on behalf of restaurateurs, Toast rolled back the service charge, at least for orders above $10. As originally designed, the fee was to be hidden under a “taxes and fees” line that was passed on to customers. Toast claimed it was to help fund investments like SEO menus and customization, but the sneaky rollout left a bad taste in everyone’s mouth.
The Big Picture: The online ordering and POS ecosystem is highly competitive, with players keeping margins low as they compete for business. The fee increase spooked the market so much that competitor Clover went out of its way to clarify it wasn’t going to do a new service charge of its own. For the payment platforms, they’re left in a sticky situation - despite doing billions in revenue, Toast currently loses hundreds of millions per year. But for restaurateurs, retailers and consumers alike, this is a big win. No wonder influential restaurateur (and Toast ambassador) Shawn Walchef calls this development “HUGE.”
3PD | Swiggy Adds Expansion Insights for Partner Businesses
Indian food delivering giant Swiggy continues to innovate; it announced the launch of its Network Expansion Insights program. The tool lets restaurateurs gather market data to find new opportunities for expansion. Inputs include cuisine, price, and city type.
The Big Picture: Matching user inputs with its internal data offers a bit a peak behind the scenes, revealing supply and demand context that the 3PDs often obscure. Is Bangalore oversupplied with biryani? Is Gadag-Berigeri craving a new dessert bar? Offering a powerful tool like this is useful in making merchants prefer Swiggy’s platform over arch-rival Zomato, but is it enough to make them stick?
CHART TIME | Who Will Pick Up UPS’ Pieces?
The UPS Strike is looking more and more real, sending the delivery world into a tizzy. On Tuesday, the company’s pilots union announced they would stand in solidarity if Teamsters strike, shutting down air operations. As this Axios chart of Pitney Bowes data shows, there just isn’t room in the system to pick up all that capacity. Brown can train managers all it wants, that’s not gonna get them into the pilots seat. There are about 12 days left before the current contract expires, which way will it go?
GROCERY | German Giants Go Their Own Ways
Aldi and Lidl - two german grocery giants with not particularly mouthwatering names. Their competition goes back to the 70s, when Lidl began copying Aldi’s discounting strategy, although both grocers trace their roots back to the 30s and 40s. The competition spans the globe, and recently the two grocers have seen rather differing outcomes in the U.S. Lidl, which only entered America in 2017, is shuttering five stores along the eastern seaboard. Aldi, which has been here longer, plans to open 120 stores this year alone - bringing its stateside total to 2,400+.
The Big Picture: It’s actually an even more complicated picture than it seems. Aldi is actually two separate divisions - Aldi Süd (South) and Aldi Nord (North.) While the company divided up Germany along those dimensions, the two arms of the same family-owned business go head-to-head in the U.S. You might know Aldi Nord by a more familiar name — Trader Joe’s — it’s owned the iconic SoCal grocer since 1979. Aldi Süd has also been in the U.S. since 1976 (as just “Aldi”) where its had decades to perfect low cost operations and innovation. Most relevant to you, dear reader, is that Aldi has much more advanced and integrated delivery operations. Its deep partnership with Instacart even includes a recently launched 30-minute convenience market. Lidl has a much clunkier integration with Shipt.
A Few Good Links
Ex-Zuul & Hungry House’s Kristen Barnett launching Culinary Creators Worldwide. CPG data group Spins names new CEO. DoorDash’s new earn-by-time model complicates labor law questions. Grocers turn to Instacart, Swiftly, in-house creations as they compete for retail media dollars. Look back at Taco Bell’s wildest brand collaborations. Sleek leaning moped officially makes U.S. launch.
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