As food delivery services race to promise consumers the quickest and most convenient options, Grubhub is getting into the ultrafast grocery space.
The aggregator announced in a Wednesday (Feb. 23) press release a partnership with Buyk, an on-demand grocery delivery startup promising fulfillment in 15 minutes or less, to make Buyk’s offerings available through Grubhub’s marketplace.
“This partnership will make the Grubhub Marketplace a one-stop shop for restaurants, convenience items and grocery supplies, building more diner loyalty and helping drive even more orders to all of our restaurant and merchant partners,” said Grubhub Director of Growth and New Verticals Kyle Goings in the release. “We’re thrilled to add Buyk to expand the number of options and delivery speed available to our diners.”
The partnership will be available in parts of New York City and Chicago in the weeks ahead, with orders fulfilled through Buyk’s network of drivers.
In December, Grubhub competitor DoorDash, the leading food delivery aggregator in the United States, announced the debut of 10-minute to 15-minute grocery delivery in New York City.
Meanwhile, eGrocery giant Instacart has been promising 30-minute deliveries from a wide range of leading grocery retailers.
Buyk CEO James Walker commented in the release, “This strategic partnership goes far beyond grocery delivery, as Buyk and Grubhub will also cooperate in the areas of hyper-localized assortment and product management, food waste optimization, as well as smart routing and safety protocols to build the best experience for our couriers and our customers.”
His point about “smart routing and safety protocols” may be an inclusion made in light of recent reports of concern among New York City legislators about the safety risks of ultrafast delivery. A new bill soon to be introduced in the New York City Council would prohibit 15-minute delivery guarantees, arguing that they lead to traffic law violations, endangering drivers and pedestrians.
Grubhub’s entry into the space follows reports of the economic challenges of ultrafast grocery, with these on-demand delivery services losing as much as $20 per order on average. Additionally, restaurant delivery aggregators continue to face mounting losses, with the high labor costs of the business model making it difficult to turn a profit.
Eighteen percent of consumers now buy groceries online more often than in stores, according to data from PYMNTS’ study “Decoding Customer Affinity: The Customer Loyalty to Merchants Survey 2022,” created in collaboration with Toshiba Global Commerce Solutions. The report, which featured the results of a survey of a census-balanced panel of more than 2,000 U.S. consumers, also noted that 20% of consumers said that delivery options would improve their loyalty to their grocer.
Get the report: The Customer Loyalty to Merchants Survey 2022