{"id":17156,"date":"2024-11-29T15:17:04","date_gmt":"2024-11-29T15:17:04","guid":{"rendered":"https:\/\/brizodata.com\/?p=17156"},"modified":"2024-12-02T15:23:44","modified_gmt":"2024-12-02T15:23:44","slug":"the-fall-of-grubhub-exploring-third-party-delivery-market-penetration-since-2021","status":"publish","type":"post","link":"https:\/\/brizodata.com\/en\/the-fall-of-grubhub-exploring-third-party-delivery-market-penetration-since-2021\/","title":{"rendered":"The fall of Grubhub: exploring third-party delivery market penetration since 2021"},"content":{"rendered":"

Sold at a 90% discount from its peak during the pandemic, what went wrong for what was once the biggest delivery marketplace in the US?<\/h3>\n

Founded in New York City in 2004, <\/span>Grubhub <\/span>dominated the early third-party delivery (3PD) market and were one of the first of their kind to IPO in 2014. They were later acquired by Netherlands-based <\/span>Just Eat Takeaway <\/span>(JET), Europe\u2019s largest meal delivery company. With operations around the world \u2014 from <\/span>Skip <\/span>in Canada to <\/span>Menulog <\/span>in Australia \u2014 JET purchased Grubhub in a play to expand into the US, with the deal <\/span>announced<\/a> <\/span>in June 2020 and closing in June 2021 for $7.3 billion USD.<\/p>\n

Just 10 months later in April 2022, it was <\/span>confirmed<\/a> <\/span>that Just Eat Takeaway was exploring options to sell the recently acquired Grubhub business. In November 2024, Grubhub was <\/span>sold<\/a> <\/span>to virtual food hall provider <\/span>Wonder <\/span>for a meager $650 million USD: a stunning loss of over $6.5B in less than four years. What could have transpired in such a short period of time to drive such disappointing results?<\/p>\n

Grubhub, DoorDash, and Uber Eats: the 3PD market battle<\/h3>\n

We analyzed foodservice market data from Brizo FoodMetrics to help visualize Grubhub\u2019s steep drop in valuation.<\/p>\n

\"A<\/p>\n

This chart shows the percentage of US foodservice establishments listed on each of the \u201cbig three\u201d third-party delivery providers in the US: Grubhub, <\/span>DoorDash, and <\/span>Uber <\/span>Eats. It captures the percentage of open establishments that partnered with these platforms over time (by quarterly average), providing insight into the competitive dynamics of the 3PD market.<\/p>\n

How to read this chart:<\/em><\/strong><\/p>\n

Each line shows the percentage of open foodservice establishments partnered with a specific provider (Grubhub, DoorDash, or Uber Eats). If every establishment in the market partnered with DoorDash, its line would reach 100%.<\/em><\/p>\n

However, since restaurants often list on multiple 3PD platforms, percentages can overlap. For example: if 100% of establishments use DoorDash, and 67% of those also use Uber Eats, DoorDash\u2019s line would be at 100%, while Uber Eats’ would be at 67%.<\/em><\/p>\n

This means that the percentages reflect the\u00a0use of each 3PD provider by establishments, not exclusive partnerships.<\/em><\/p>\n

Even at a glance, Grubhub\u2019s downward trajectory is clear to see. At the time of their acquisition by Just Eat Takeaway in Q2 2021, they were holding their own against their rivals. Almost immediately after, their market penetration began to dwindle. Fast forward to Q2 2022 and it\u2019s not surprising that JET was trying to unload a quickly depreciating asset, which took another couple of years to sell \u2014 at which point it was worth 90% less than what they had paid for it.<\/p>\n

Other events of note in Grubhub\u2019s timeline:<\/p>\n