Grubhub’s parent company Just Eat Takeaway continues to seek out strategic partnerships as a way to improve its U.S. business.
“The CEO Jitse [Groen] of Takeaway has been very vocal about, ‘Hey my preference is to have a strong partner and continue to have ownership in Grubhub,’” Grubhub CEO Adam DeWitt said Thursday during Wall Street Journal’s Global Food Forum.
“A sale is part of it, but it’s also about finding strategic partners, channel partners,” he said. “It’s more about finding a way to help Grubhub grow than it is necessarily about the sale.”
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Just Eat Takeaway said in April it was considering a partnership and/or partial or full sale of the company it bought for over $7 billion in 2020. Earlier this month, Bloomberg reported JET had initial interest from Apollo Global Management Inc. among other potential partners or buyers. Apollo has made major plays in the restaurant space before, including taking Chuck E. Cheese private, buying Qdoba in 2018 and selling CKE Restaurants in 2013.
While the early days of the pandemic helped Grubhub boost order volume and restaurant partnerships, the company’s momentum slowed in 2021. With more people working from home, market share eroded because competitors had a better stronghold in the suburbs. In April 2019, Grubhub had 32% share of sales compared to its meal delivery competitors, according to Bloomberg Second Measure, but as May 2022, it had 13%.
Commission fee caps, which became permanent in San Francisco and New York City, have been eating away at profitability. Grubhub has made some gains in market share in city centers, but it continues to struggle against competitors Uber Eats and DoorDash.
Grubhub has been diversifying its base, expanding into convenience stores, about 6,000 of which are on its platform, and launching its own convenience product. It also has been focusing on delivery to college campuses and has been expanding into hotels and stadiums.
“The strategy for Grubhub from Takeaway has always been how do we accelerate growth at Grubhub [and] how do we become a good partner for Grubhub,” DeWitt said.