Americans still love ordering from Grubhub

Something to smile about.
Something to smile about.
Image: Reuters/Lucas Jackson
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Grubhub keeps delivering.

America’s largest restaurant ordering platform said today (Oct. 25) that it sold $867 million worth of food in the third quarter to 9.81 million customers. Those sales were up 18% from the same period a year earlier, while diners jumped 28% year over year. Grubhub reported revenue of $163 million, up 32%, and profit of $13 million, a 1.5% decline from the third quarter of 2016. Grubhub’s stock rose 5% in morning trading.

Grubhub has been investing aggressively in its food ordering and delivery capabilities ever since Silicon Valley set its sights on “disrupting” the industry. In August, Grubhub, the parent of popular New York food-ordering platform Seamless, acquired Eat24 from Yelp for $287.5 million in cash. Grubhub CEO Matt Maloney called the deal a “win-win,” one that would absorb Eat24’s strong West Coast and Miami customer base while also helping the company expand its restaurant offerings.

Grubhub completed two other acquisitions in the most recent quarter. It bought Boston-based Foodler for an undisclosed cash sum in late August. It struck a delivery deal with Groupon and acquired 27 markets of its food-delivery platform OrderUp, in September. Two years ago, Grubhub created its own delivery system, instead of simply taking orders and leaving delivery to someone else. As of the second quarter, that delivery operation accounted for 20%, or about $176 million, of gross food sales.

In the meantime, many of the venture-capital backed food-delivery startups that looked so promising a year or two ago have fizzled out. Prepared meal services Sprig and Maple both closed this year, while Munchery stiffed early backers and laid off staff. Other food delivery companies have added surge pricing to charge consumers higher fees during busy times. Meal-kit company Blue Apron, which went public on the New York Stock Exchange in June, has lost nearly 50% of its value, and recently laid off 6% of its 5,400 workers, or about 300 people, in a “company-wide realignment.”

UberEats and Amazon Restaurants are worth watching. Like Grubhub, Uber has aggressively expanded its food delivery operations over the last year. UberEats has a partnership with McDonald’s and was reportedly profitable in 27 of 108 cities as of July.

Amazon has been steadily building out its food ordering platform and more recently started promoting it to Prime members, with coupons and referral codes for first orders. The company said Monday (Oct. 23) that it will soon begin accepting restaurant orders from within the Amazon app and letting customers pay with pre-stored information.