Retail

Postmates CEO Says Grubhub Stock Plunge Doesn’t Reflect Wider Industry

Following Grubhub’s earnings report and stock plunge, the chief executive of a competing service said Grubhub’s results do not reflect the potential of the wider food delivery business.

When Postmates Co-Founder and CEO Bastian Lehmann was asked if the catastrophe at Grubhub was a Grubhub problem, he said it was, and “the idea that bad management equals a bad market is a shoe that doesn’t fit the new breed of companies,” CNBC reported.

Grubhub’s shares dropped over 43 percent in one day after it reported dismal guidance and less-than-expected earnings, which caused downgrades from Wall Street firms with the inclusion of Oppenheimer and Bank of America Merrill Lynch. The stock recovered roughly 9 percent of that drop as of Wednesday’s close. Grubhub, however, has reportedly lost over half of its market value this year.

Lehmann told “Squawk Box” that it is on firms to set themselves apart from one another as rivals like DoorDash, Uber Eats, and Seamless pack into the busy food delivery space.

“The right way to think about the space is not a winner take all market,” Lehmann said, according to the CNBC report. “You will have different brands in the space that appeal to very different customer bases, based on the merchants that they provide access to.”

Matt Maloney, founder and CEO of Grubhub, said per a past report, “Our teams had another strong quarter of execution, adding nearly 1 million active diners and 15,000 restaurants to our platform. As we detail in our shareholder letter, we are entering the next phase of growth in the U.S. online food ordering industry, where it is increasingly important to create a differentiated experience for diners and long-term value for restaurants.”

Indeed, the online food delivery space is becoming more competitive and undergoing changes. For starters, delivery apps may be known for working with restaurants for dinner or lunch orders, but they are also bringing retailers like pharmacies onto their platforms. Walgreens and Postmates, in one case, announced a collaboration to provide on-demand delivery for shoppers seeking over-the-counter medications, among other items, in New York City.

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