Grubhub, a meal delivery service and American subsidiary of the Dutch company Just Eat Takeaway, has found an agreement with Amazon this July 6 to expand its clientele. The e-commerce giant has announced a stake in the capital of Grubhub and will introduce the service into its Amazon Prime offer. News that comes as Just Eat considered selling Grubhub completely.
Amazon could invest more in Grubhub
Amazon strengthens its position in the food sector. The company already offers its Prime subscribers a home grocery delivery service and owns the Whole Foods Market chain of stores. She wants to go further and is now delivering ready meals. The e-commerce behemoth plans to acquire 2% of the capital of Grubhub.
With this agreement, the American service of Just Eat thinks it can increase the number of deliveries and customers linked to its Grubhub+ offer. This subscription allows users to benefit from many discounts. They can also take advantage of free delivery orders in a selection of restaurants. The offer will now be available to all Amazon Prime members for one year, after which they will need to subscribe to the subscription to continue to benefit from it.
Grubhub CEO Adam DeWitt explained that this agreement will also provide new opportunities for delivery people and restaurants that collaborate with the application with the arrival of new customers. Just Eat believes Amazon could increase its stake in Grubhub by up to 15% depending on how the service performs.
Just Eat considered withdrawing from the United States market
The delivery company believes that the agreement reached with Amazon will have no immediate consequences on its growth. According to her, we will have to wait until next year to see the effects. The Dutch company had spent the sum of 7.3 billion dollars for acquire Grubhub in 2020which had allowed it to overtake Uber Eat in Europe.
DoorDash, a service primarily present in North America, has remained the leader in ready meal delivery in the United States since 2019. In the first quarter of 2022, DoorDash revenue was $1.46 billion for 404 million orders. Just Eat announced 89.6 million orders for the same period in North America.
This significant competition and the decline in its growth in the post-covid situation, a profitable period for the delivery sector, prompted Just Eat to consider Grubhub’s Total Sale. Shareholders believe the company should focus on its European business. The recent agreement with Amazon, however, could turn the tables.