City Snapshot: Just Eat Takeaway partners with Amazon in the US to bolster struggling Grubhub service | New

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Just Eat Takeaway has partnered with Amazon in the US to offer free deliveries to millions of Prime members on orders with its beleaguered Grubhub service.

The business deal, which begins today, gives Amazon a 2% stake in Grubhub and follows pressure from investors to find a partner for the US app.

The deal will allow Prime members across the US to sign up for a free one-year subscription to Grubhub+ to access unlimited free delivery from hundreds of thousands of restaurants on Grubhub throughout the year. In addition to $0 shipping on qualifying orders, Grubhub+ members get access to member-only benefits and rewards.

Amazon will see its stake in Grubhub increase to 13% if the new partnership attracts enough new customers.

Just Eat said it expects the deal to expand Grubhub+ membership while having a neutral impact on Grubhub’s earnings and cash flow in 2022, and add to its bottom line net and its cash from 2023.

Grubhub CEO Adam DeWitt said the move will help the company continue its long-standing mission of connecting more diners to local restaurants.

“Amazon has redefined convenience with Prime and we’re confident this offering will expose many new customers to the value of Grubhub+ while driving more business for our restaurant partners and drivers.”

The Business Agreement automatically renews each year unless terminated by Amazon or Grubhub.

Just Eat added in the statement that it continues to “actively explore” a sale of Grubhub.

The group bowed to mounting pressure from investors in April to consider bringing in a strategic partner for Grubhub or explore a partial or full sale of the US food delivery app.

He bought the company for $7.3 billion at the height of the pandemic-fueled food delivery boom, but orders have since fallen dramatically and competition from Uber and DoorDash has intensified.

Profitability concerns weighed on Just Eat’s share price, with Grubhub posting a pre-tax loss of 403 million euros in 2021.

Shares of Just Eat soared 15.2% to 1,367.8p as markets opened this morning following the news.

morning update

Spirits Group Distill appointed a new chief commercial officer and entered into a new distribution agreement as part of moves to reshape the group for accelerated growth.

Alex Baker will join the company behind the RedLeg, Blackwoods and Blavod brands to take responsibility for the direct management of key UK non-trade customers, as well as leading the company’s ongoing efforts to expand and open up new export markets.

Baker most recently served as business unit controller for grocery, e-commerce, convenience and discount stores at Hi-Spirits.

He began his career in sales at Nestle Purina and moved into the beverage industry with a role at William Grant & Sons, where he led commercial delivery with retail partners such as Sainsbury’s, Morrisons and Waitrose.

Distil has also announced that it has entered into a new distribution agreement with Marussia Beverages UK, following the decision to withdraw its spirits portfolio from long-standing UK distributor Hi-Spirits.

The group said dedicating commercial resources internally through the creation of Baker’s post had enabled the “significant change” and would allow Distil to take direct ownership of the service to its key UK customers.

Executive Chairman Don Goulding added: “This significant change is part of a broader business reshaping for Distil. By focusing without distraction on Distil’s portfolio of brands, it will help us more easily manage cost increases and better serve our customers to implement accelerated growth plans.

The FTSE100 rebounded from yesterday’s beating to rise 2.4% to 7,192.75 points this morning.

Early birds included Ocado, up 4.2% to 839.2p, SSP Group, up 4.1% to 241.8p, and Naked Wines, up 4.1% to 169.3p.

Science in Sport, Kerry Group and Devro were among the losers, down 1.7% to 45.2p, 0.4% to €96.20 and 0.3% to 178.8p respectively.

Yesterday in the city

Recession fears continued to plague UK markets as the FTSE 100 plunged 3% to 7,019.62 points yesterday.

Sainsbury’s, which painted a gloomy picture of the rushed consumer, held up well amid the selloff, rising 1.3% to 211p as it performed slightly better than expected in the first quarter.

B&M European Value Retail fell 1.8% to 359.1p as it announced the appointment of Mike Schmidt as its new chief financial officer.

Glanbia and Bakkavor escaped the pessimism to rise 6.6% to €10.35 and 3.3% to 94.2p respectively, while Ocado rose 2.6% to 805.4p, Deliveroo rose 2.9% to 92.8p and Vrigin Wines UK rose 1.9% to 79p.

Fallers included Parsley Box, down 5.3% to 17p, THG, down 5.3% to 76.2p, and Associated British Foods, down 4.4% to 1,526.5p.

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