Jul 6, 2022 - Economy & Business

Amazon still hungry for restaurant delivery offering

Illustration of a cell phone wearing a napkin in between a fork and spoon.
Illustration: Lindsey Bailey/Axios

Amazon is keeping close tabs on grocery delivery companies

Why it matters: The digital behemoth stands to benefit from expanding its stronghold on consumers while waiting out a volatile time for services dependent delivery workers.

Driving the news: Grubhub’s parent company, Just Eat Takeaway.com, announced a new deal today with Amazon which would give the tech giant the option to buy as much as a 15% stake in Grubhub. 

  • At the same time, Amazon said it would give its U.S. Prime members a free 1-year subscription to Grubhub’s $0 delivery service (worth about $120).

The big picture: Grubhub, like other food delivery platforms, has experienced a flash cycle of boom and bust since the start of the pandemic amid labor shortages.

  • Just Eat has been trying to unload Grubhub after acquiring it for $7.3 billion last year. 
  • Amazon, which abandoned its initial attempts at restaurant delivery, currently has a deal with UK's Deliveroo, that is similar to its one with Grubhub (taking a stake and offering a new kind of Prime perk). 

Between the lines: Amazon could be setting itself up for another attempt at offering restaurant delivery while making Amazon Prime even stickier and more lucrative (members spend roughly four times as non members). 

What to watch: Last month, Grubhub was reported to have attracted some early interest from private equity suitors like Apollo Global Management, Axios Pro’s Kimberly Chin noted today.

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