Grubhub (NYSE:GRUB), the largest restaurant delivery player in America, recently partnered with Dunkin’ Brands (NASDAQ:DNKN) to provide deliveries for over 400 Dunkin’ Donuts stores across New York City. The offical launch follows several months of tests in select stores.
Grubhub will offer the deliveries for free during the last week of June, and plans to expand the service to Dunkin’s other markets — including Boston, Philadelphia, and Chicago — in the coming months. Let’s see how this deal could benefit both companies.
…Dunkin’ is looking for regional leaders
Grubhub controlled 68% of New York City’s delivery market in April according to Second Measure. Grubhub is also the market leader in Boston and Chicago, where it held market shares of 44% and 40%, respectively. That’s probably why Grubhub and Dunkin’ listed those cities as the next markets after New York.
However, it also indicates that the donut chain prefers to work with regional leaders, and explains why it didn’t sign an exclusive nationwide partnership with Grubhub. DoorDash is the market leader in Washington, D.C., San Francisco, San Diego, San Antonio, and Dallas/Fort Worth, while Uber Eats is the market leader in Miami.
Dunkin is also still partnered with DoorDash in certain cities, and doesn’t plan to end that relationship anytime soon. Therefore, investors shouldn’t confuse Grubhub’s Dunkin’ deal with the bigger Yum deal, which included exclusive deliveries for KFC and Taco Bell and a $200 million investment from the fast food giant.