Have you ever gotten that feeling of regret after ordering a takeaway? Well, Just Eat might be having second thoughts too. The online food ordering company is looking to sell off US-based Grubhub, only a year after picking it up for $7.3b. The tie-up created the world’s largest food delivery service outside China and gave Just Eat access to the lucrative food delivery market in the US, adding to its base in some of the world’s other most profitable markets — the UK, the Netherlands, and Belgium. The deal was struck during the height of the pandemic/ lockdown food ordering boom and since it has seen orders drop by 1%.
Grubhub (GRUB) was an original market leader in the food delivery space when it first launched in 2004 — however, competitors such as Doordash (DASH) and Uber (UBER) have nibbled away at its market share. Parent company Just Eat has also had a tough time with the Netherlands-based company announcing a pre-tax loss of more than €1.1bn. The food delivery group announced on Wednesday that it was “actively exploring the introduction of a strategic partner into and/or the partial or full sale of Grubhub”.
Why it matters
It seems like food delivery apps are faltering post-pandemic, although a specific area of profit could be the rise of on-demand groceries, with Deliveroo in the UK pivoting to the area coupled with a 5.4% sales bump for Nestle.