Dive Brief:
- Just Eat Takeaway.com plans to transition Seamless to Grubhub as part of its single-brand strategy, Just Eat Takeway.com CEO Jitse Groen said on Thursday during an earnings call with investors.
- This strategy will allow the company to optimize its marketing spend and benefit from the network effects around one single brand, he said.
- In addition, Grubhub will refocus its marketing around growing in its top metropolitan areas, like New York City and Chicago, instead of investing in growth across the U.S. as a whole, Groen said. The company plans to share more details about its Grubhub strategy during its investor day in October.
Dive Insight:
Just Eat's latest initiatives around Grubhub reflect the strategies it has already successfully deployed in Europe so winding down the Seamless brand, which is mostly known for its presence in New York, is not entirely surprising. In Europe, the company invests more heavily in the U.K., where it has a significant stronghold.
"We strongly believe that the U.S. cannot be seen as one market, like the U.K. or Germany, but that each metropolitan area has its own characteristics," Groen said. "We will therefore refocus strategic efforts to Grubhub strongholds whereby the focus will be to expand from that stronger base, rather than target the whole country."
That doesn't mean Grubhub will not be in regions like Ohio or Arizona, he said, but the company's larger efforts will be focused elsewhere.
Just Eat board member and former Grubhub CEO Matt Maloney said the company expects there to be plenty of room to grow in metropolitan areas in terms of both new diners and higher frequency, which is more reflective of mature markets around the globe where customers order more often.
"The way we look at the world is in terms of supply, service and consumer pricing," Maloney said. "We're still matching supply in some of the metros, but, obviously we've exceeded supply in the ones where we're leading. In terms of service and logistics we're as good or better than competition. In terms of pricing we're as good or better than competition."
The company also just rolled out a pricing guarantee in which it said it has the lowest prices compared to competitors or it would pay the difference up to $10 and offer $5 in Grubhub Perks to help make up the difference.
One of its biggest markets, New York City, may take more time to grow market share, especially since it is just coming back online after the pandemic. Many offices haven't reopened, which has stalled its Seamless B2B product, which Maloney said is highly profitable and a strong product. Challenges in the consumer business have also cropped up, he added. Restaurants across the country, especially in Manhattan, are having trouble employing workers, he said.
"With a majority of our restaurants being self-delivery [in New York City], they're having a hard time not only getting customers to come back in, but also to actually be operable," he said. "In general, New York's coming back, but definitely slower than others, which would impact all competitors, but us more so because we have such a strong leadership position in New York City."
Maloney said the company is confident in its ability to expand its leadership in this market, not just in Manhattan, but also in the boroughs and surrounding areas because of the renewed focus and strategy the company will deploy.
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July 19, 2021 at 08:49PM
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Grubhub to absorb Seamless brand following Just Eat transaction - Restaurant Dive
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