In a surprising turn of events, European food delivery giant Just Eat Takeaway has announced it will sell its US subsidiary Grubhub to fast casual restaurant chain Wonder for just $650 million. The deal comes a mere four years after Just Eat acquired Grubhub for a staggering $7.3 billion at the height of the pandemic-driven food delivery boom.
The Rise and Fall of Pandemic Food Delivery
When Just Eat Takeaway scooped up Grubhub in June 2020, online food ordering was surging as lockdowns kept diners at home. The Dutch company outbid Uber in a fierce battle to gain a foothold in the lucrative US market. At the time, the merger was touted as creating the world’s largest food delivery service outside of China.
However, as economies reopened and consumers returned to in-person dining, the delivery boom began to fizzle. Just Eat’s share price has plummeted nearly 90% from its October 2020 peak, and executives faced mounting pressure from investors to offload the struggling Grubhub unit.
The sale of Grubhub to Wonder will increase the cash generation capabilities of Just Eat Takeaway.com and will accelerate our growth.
Jitse Groen, CEO of Just Eat Takeaway.com
Regulatory Challenges and Fierce Competition
Grubhub and other delivery apps have grappled with fee caps enacted by New York City and other US cities to limit the commissions charged to restaurants. These regulations, combined with intense competition from rivals like DoorDash and Uber Eats, have squeezed profit margins in the cutthroat delivery sector.
A New Chapter with Wonder
For Wonder, a fast-growing chain led by the “LeBron James of e-commerce” Marc Lore, acquiring Grubhub is a key step in its ambitious expansion plans. The company currently operates 28 restaurants, primarily in the New York City area, and aims to have 100 locations by early 2026.
Bringing Wonder and Grubhub together is the next step in our vision to create the super app for meal time, re-envisioning the future of food delivery.
Marc Lore, CEO of Wonder
The $650 million deal, expected to close in early 2025 pending regulatory approval, will allow Just Eat to retain no material liabilities related to Grubhub. For Grubhub, the acquisition offers a fresh start under new ownership as it navigates the post-pandemic landscape.
The Future of Food Delivery
As the Grubhub sale illustrates, the once-booming food delivery sector is facing a reckoning. With diners returning to restaurants and regulatory pressures mounting, delivery platforms must adapt to survive.
Some key trends to watch in the coming years:
- Consolidation as smaller players get acquired or go out of business
- Diversification beyond restaurant delivery (e.g., groceries, convenience items)
- Innovations in delivery technology and logistics
- Partnerships between delivery apps and restaurant chains
- Ongoing battles over commission fees and worker classification
As the dust settles on the pandemic delivery boom, one thing is clear: the food delivery landscape is entering a new era. The Grubhub-Wonder deal may be just the first of many shake-ups to come as the industry confronts a shifting market and regulatory realities.
For consumers, the immediate impact may be minimal. But behind the scenes, the tectonic plates of the food delivery world are shifting, setting the stage for a radically different – and perhaps more sustainable – industry in the years to come. As always, those who adapt will thrive, while those resistant to change risk getting left behind.
