Grubhub Orders Fall by the Millions as Diners Cut Back

Grubhub Orders Fall by the Millions as Diners Cut Back

The global food delivery behemoth, Just Eat Takeaway, has revealed a significant dip in orders within its North American market, which encompasses Grubhub in the United States and SkipTheDishes in Canada. The latest earnings report, released on July 26, unveiled a 15% year-over-year decline in orders for the first half of the year, plummeting from 171 million to 145 million.

Accompanying this downturn, the gross transaction value witnessed a 12% reduction, dropping from approximately $6.5 billion to around $5.7 billion. In response to this challenging trend, the company is intensifying its focus on discounts and savings initiatives to counteract the decline.

“We continue refining and optimizing our consumer pricing strategy, including the interplay of service and delivery fee levels, which will be aligned with consumer expectations with the aim to deliver great value to our consumers,” explained Jitse Groen, CEO of Just Eat Takeaway. “At a time of rising inflation, we remain committed to being a very much affordable delivering provider for food and convenience for customers in all of our markets.”

The pursuit of heightened consumer engagement and retention has driven Grubhub to unveil an upgraded subscription program, designed to entice customers with an array of perks and promotions. This move arrives as escalating restaurant prices lead consumers to seek more budget-friendly dining options. According to PYMNTS’ recent study, nearly half of all restaurant customers are gravitating towards pickup due to inflation, with 48% reporting an increased likelihood of choosing pickup over delivery.

Moreover, the restaurant industry as a whole is grappling with a decline in dining activity. A separate PYMNTS study conducted late last year unveiled that approximately a third of consumers have reduced their restaurant purchases amid inflation and rising costs.

The surge in restaurant prices, surpassing the overall rate of food inflation in the United States, is evident in the latest Consumer Price Index (CPI) data from the Bureau of Labor Statistics. The figures indicate that while food inflation rose by 5.7% year over year in June, restaurant prices surged by a significant 7.7%.

Grubhub’s current challenges stem from consumers cutting back on their food delivery expenditures, with potential customers opting for more popular competitors. PYMNTS’ supplementary research underscores this trend, revealing that as of May, 74% of consumers use DoorDash, while 50% opt for Uber Eats and 37% choose Grubhub.

In response to these market dynamics, Grubhub recently announced a 15% reduction in staffing levels, impacting approximately 400 employees.

Against this backdrop, Just Eat Takeaway continues its pursuit of a buyer for Grubhub. “Management, together with its advisers, continues to actively explore the partial or full sale of Grubhub,” the company stated. While the outcome of these strategic actions remains uncertain, the company has affirmed its commitment to provide further updates as appropriate.

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