An owner of a South Shields takeaway is claiming that “Just Eat is killing small businesses.”
Syed Alom, 33, owner of Arman Spice on South Eldon Street, has seen his profits disappear over the last few years, which he attributes to Just Eat charging over 20% in commission and VAT on each meal bought through the service.
Having joined Just Eat in 2009, he was one of the first takeaways in the area on the service. When he joined the service charged just 9 per cent in commission plus VAT, however he has seen that figure rise to 13 per cent in commission plus VAT.
It is these rising costs which Mr Alom has attributed to the financial situation that his business is now in, and he now fears that the business his recently deceased father opened in 2005 is close to closing down. He said “Just Eat is killing the business… There’s no such thing as profit anymore. I’m not in profit, I’m in the red.”
Despite this he does not want to give up easily as he attaches great sentimental value to his family business. He is the only one of five brothers who decided to work in the shop, and is desperate to keep the business running to the high standards his customers expect.
He is now urging his customers to order directly from the takeaway through his own app or the phone rather than through Just Eat, who recently announced a 43 per cent rise in revenue in their first quarter. He is also planning to completely leave the service as soon as possible. However, he is not in a position to do so just yet as he can’t afford advertising because of the costs to Just Eat.
“I’m like in a prison. I am trapped. Unless I do something drastic I can’t complain anymore. Customers have asked ‘can’t you leave them?’ But would my organic customers follow me if I turned off Just Eat?”
And he wants more people to think of the effects international services, such as Just Eat, has on smaller local businesses before using them. As while there are pros to using and being on Just Eat, Mr Alom believes that “the cons now outweigh the pros.”
A spokesperson for Just Eat said “We are aware that partnering with Just Eat has generated significant order growth for our restaurant partner, Arman Spice. We look forward to working ever more closely together to ensure the continued success of this business.”
“Just Eat works with 71,000 restaurant partners around the world, almost 28,000 of which are in the UK. We take our responsibilities to all of them very seriously and we have a proven track record in helping restaurants accelerate their growth. In the last year, we have invested over £40m in marketing and technology to add value to their business on a daily basis.”