Grubhub is returning to its carryout roots with the launch of a new platform designed to help restaurants grab a larger share of the industry's rapidly growing off-premise business, projected to reach $402 billion by 2022.
Delivery is Grubhub’s biggest battleground, having lost its lead last year to market leader DoorDash. But today, the Chicago-based third-party delivery company is focusing on a larger chunk of the off-premise pie with the introduction of Ultimate Grubhub. The fully integrated digital ordering platform allows diners to track the status of their orders through any digital channel including a kiosk, an in-house display screen or the Grubhub app.
Display screens inside the restaurant resemble order tracking systems installed at next generation Dunkin’ stores.
“Whether diners order for pickup or delivery on Grubhub, at an in-store kiosk, or directly with a cashier, diners get complete visibility in the app and on the displays at the storefront through the Ultimate technology on where their order stands,” Grubhub said in a statement.
The company has been piloting the new digital workflow solution, which connects front and back-of-the house systems, at restaurants in Chicago and New York including Tahini Grill in New York City. The restaurant is using Grubhub’s kiosks, the first new hardware product developed by the company since issuing restaurant tablets for third-party delivery orders.
David Morton, co-owner of Chicago-based DMK restaurant group, said Grubhub’s new system has allowed its restaurants to provide better service to customers with less effort and cost. DMK restaurants include Burger Bar, Fish Bar, Henry’s and Marshall’s Landing.
“This is a game changer in quick-serve and fast casual restaurants,” Morton said in a statement.
Restaurants adding Grubhub’s kiosks, for example, will likely see efficiencies as cashiers can be redeployed to help fulfill digital orders, the company said.
On the consumer side, CEO Matt Maloney, a 2020 NRN Power List recipient, said Ultimate will give restaurant guests the kind of seamless ordering system they desire.
“With Ultimate, we went even further by building integrated kiosks and a digital queue – in person and online – so diners can see the exact status of their order at any time,” Maloney said in a statement. “Most people do not want to order in person or by calling if they have an alternative, and by integrating pickup with delivery orders our restaurant partners have a complete picture to more efficiently manage their operations.”
Grubhub declined to reveal how much Ultimate will cost restaurants who choose to adopt the system.
"We don’t provide information on specific contractual arrangements that we have with our partners as this varies depending on the restaurant,” Padma Rao, vice president of special projects at Grubhub, told NRN in a statement. “However, we are confident that Ultimate will be financially beneficial to our partners. Our pilots have shown that Ultimate improves efficiency and customer satisfaction, leading to lower costs and an increase in orders."
Though Grubhub has denied rumors that the company is for sale, a move like this could help the company look good to any potential buyer, said Aaron Allen, a global restaurant consultant based in Chicago.
“For every restaurant location that these delivery companies sign up, they add $107,000 to the valuation of their company,” he said.
Grubhub’s carryout push is not a stretch for the brand.
The company was founded in 2004 by two web developers looking for an easier way to order takeout without flipping through paper menus. The company, which has been under siege for its delivery practices, didn’t offer last-mile delivery until 2015 -- a year after going public.
At this month’s ICR Conference, an off-premise panel focused on the importance of carryout because margins are much better compared to delivery. Plus, it represents a larger chunk of off-premise sales.
According to research from the National Restaurant Association, 93% of off-premise operations are still traditional takeout.
“Takeout is still a massive part of the overall off-premise space,” said ICR panelist Noah Glass, CEO and founder of online ordering platform Olo.
According to Wall Street firm William Blair, off-premise restaurant sales in 2018 – which include delivery, catering and takeout -- were $279 billion. The company projects sales to reach $402 billion by 2022.
Delivery will grow from $25 billion to $62 billion in 2022, according to the William Blair report.
Today, DoorDash logs a 35% share of the meal delivery market, ahead of Grubhub’s 30%, according to Second Measure, a firm that analyzes U.S. consumer spending.
Contact Nancy Luna at email@example.com
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