Grubhub Orders Fall off as Competitors Gain Ground

Grubhub is taking a hit amid ongoing financial challenges, even as competitors continue their growth.  

The aggregator’s owner, Just Eat Takeaway, shared in its third quarter 2023 financial results Wednesday (Oct. 18) that ordering in North America (which, according to CEO Jitse Groen, is “mostly Grubhub”) fell by 13% year over year, from 78.7 million to 68.5 million, while gross transaction value decreased 18%.

Groen attributes this decline in part to the tapering off of the boom that the company saw when it initially partnered with Amazon last year to offer U.S. Prime customers free one-year Grubhub+ membership, suggesting that the aggregator’s move in June to double down on the deal has not been enough to recover sales values.

Amid these challenges, the multinational food delivery company continues to look for a buyer for Grubhub. However, as Groen put it, “It is not the most ideal market to be selling anything.”

The company has been struggling to find a buyer for some time, having initially put the aggregator up for sale in the first half of 2022.

Indeed, PYMNTS Intelligence’s Connected Dining series, which draws from surveys of thousands of U.S. consumers, reveals that adoption of Grubhub has trended negative, as its leading competitor has grown its share.

In June, 35% of aggregator users reported that they were Grubhub customers, down from 38% at the close of 2021. Meanwhile, 77% reported ordering from DoorDash, up from 71% at last year’s end. Uber Eats, for its part, has lost ground with aggregator users but remains well ahead of Grubhub, with adoption among aggregator users falling to 49% from 54%. 

DoorDash, the United States’ leading aggregators, has continued to tout growth, while Uber Eats has held roughly steady in terms of sales. The former shared in its most recent earnings report that total orders grew by 25% year over year in Q2 2023, while Uber reported in remarks accompanying its Q2 results that its delivery business in the United States and Canada “performed well” with “stable category position.”

In fact, PYMNTS Intelligence’s Provider Ranking of Aggregator Apps, which ranks leading platforms on factors including usage, downloads and channel coverage, saw Grubhub fall by four points in the latest ranking, down to tenth place, while DoorDash and Uber Eats held onto their spots as No. 1 and No. 2, respectively.

International Aggregators

Meanwhile, London-based food aggregator Deliveroo, which has a presence in 10 countries across Europe and Asia, reported its financial results Thursday (Oct. 19). The aggregator said it is seeing a more moderate decline across the markets in which it operates, with orders down 1% year over year.

Additionally, fewer consumers are engaging with its platform. Monthly active consumers fell 2% relative to last year. However, even with these declines, gross transaction value and revenue increased slightly, up 5% and 3%, respectively, in constant currency.

“I’m encouraged by the improving growth trends in key International markets,” founder and CEO Will Shu said in a statement.

Delivery Takes a Hit 

Back stateside, ongoing financial challenges have made consumers more cautious about ordering delivery. PYMNTS Intelligence’s report “Connected Dining: Rising Costs Push Consumers Toward Pickup,” which is based on a survey of more than 2,100 U.S. consumers, revealed that 58% of off-premise customers pick up restaurant meals to save on delivery fees, and 48% said inflation has made them more likely to choose pickup over delivery. 

Indeed, restaurants are seeing their delivery businesses take a hit as pickup sales grow. Most recently, Domino’s observed last week that, in its third quarter, same-store carryout sales in the U.S. rose 1.9% year over year on top of a 19.6% increase in Q3 2022, while delivery fell 2.3% after a 7.5% decrease last year.