![]() Up until the food delivery apps disrupted the industry, Domino's was locked in a war with legacy brick-and-mortar players like Papa John's ( $PZZA) and Pizza Hut ( $YUM), as it wanted to claim the title of the #1 pizza chain in America. ![]() Food delivery apps came, partnered up, and are now conquering the concept of pizza on demand. With the ongoing fray taking place to secure recurring revenue from consumers, GrubHub could be hard-pressed to keep growing its ‘active diner’ headcount - and if it sees active diners’ usage begin to decline on its platform, this would be a clear sign its competitors are successfully taking a bite of its revenue.Domino's Pizza ( $DPZ) is feeling the heat of what we call the Food Delivery Wars, a nationwide battle between third-party apps delivering local food - in this specific case, pizza - for low fees in order to edge out the competition. The company currently focuses on grocery deliveries, but with its newfound funding and the synergies it could have with restaurants, it wouldn’t be far-fetched to think Instacart could also one day rival the offerings of Square, GrubHub and Yelp. gorilla in the room could turn out to be Instacart, which recently took on more than $200 million in funding at a $2 billion valuation. Already, Uber is scaling up a competitor to GrubHub. The barriers to entry in the food delivery business are low, meaning that other competitors could emerge, as well. ![]() Yelp, which had long been rumored to branch out of the ratings game and into verticals that allowed it to draw more revenue from its massive base of businesses, struck a $134 million cash-and-stock deal to buy Eat24, another California-based delivery startup. ![]() Notably, while Yelp shares rose today after its big deal announcement, GrubHub's stock slumped. Last week, the company bought Massachusetts-based DiningIn and California-based Restaurants on the Run, giving GrubHub a pair of offerings to fight off Yelp and Square. GrubHub is moving, tooįor its part, GrubHub bought a pair of food delivery startups as it ramps up a plan to start delivering food that is ordered via its app in nearly a dozen cities, covering more than 3,000 restaurants. While Square’s big buy aims to address the proverbial “1%” of both diners and restaurants, other competitors are casting a wider net to reach the most users possible. In August, online payment service Square branched out into new territory with a $90 million buy of Caviar, a high-end food delivery startup that tacks on a hefty service fee to bring consumers the finest in high-end dining. Grubhub charges restaurants a lesser fee than its competitors for access to its platform and its broad base of users if Square and Yelp opt to reduce what they make off restaurants in lieu of pushing higher rates on to consumers, their companies Caviar and Eat24 will instantly become more viable to their respective parent company. With wait times for popular restaurants closing in on an hour, or longer, at peak times in markets like New York, every company slugging it out for scale has few options to differentiate their service. GrubHub has successfully cultivated a loyal user base through its easy-to-navigate user interface, but prolonged wait times - as Uber has already demonstrated - could be enough to push some consumers to ante up for a premium rate at peak times. Account icon An icon in the shape of a person's head and shoulders. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |