There are several online food delivery services. So, of course the competition is heating up. With this being said Grubhub isn't exactly implementing the same strategy as everyone else. Grubhub is doing solid in the first quarter. Forman explains that, "competitors seem content to sacrifice their bottom lines in the fight for market share, Grubhub says it is taking a more disciplined approach". In other words, they are keeping cool so they can stay in the fight without completely ruining the brand.
Unfortunately, Grubhubs market share was down 15%. This would be it's first net loss since they have been a public company. This consequently put DoorDash as market leader and UberEats trailing behind! Due to this, Grubhud released an initial public offering. One reason, to prove itself but secondly to show how much they were spending just to be competitive! In doing so this would show investors that this would be something worth investing in.
Even so they are spending a lot just to stay relevant in the market, they are putting their foot down and saying NO to raising spending. This raised their stock to 10%, a huge sigh of relief for investors!
Even though competitors like UberEats and DoorDash are gaining market share, Grubhub is gaining CUSTOMERS! In fact, Forman says, "it acquired a record 1.6 million new diners in the first quarter—an improvement upon the 1.3 million acquired in the prior quarter". This shows how much customer quality is important to them. In Conclusion, Grubhub may have to fight to stay relevant but they definitely won't be pushed around.
I picked this article because i've always been interested in how well these online delivery services perform. It's a cool concept because they really didn't have to hire people for this and they do so well.
Article by: Laura Forman April 26, 2019 @ 10:39am
Link: https://www.wsj.com/articles/grubhub-wont-fizzle-as-competitors-sizzle-11556289572
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