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JET CEO Says Grubhub Sale Is “Proving Difficult”
Walmart+ Travel launch, Amazon Fresh closes U.K. markets
Woohoo, it’s Q2 earnings season; that means we’ll have lots of fun charts for the coming week or so, as companies show how they’ve managed headwinds in the first half of 2023. First up is Just Eat Takeaway.com, which just can’t shake off the weight of its Grubhub acquisition. Oh and if you’re traveling, maybe take a look at Walmart+’s latest innovation?
Grubhub Weighs on Just Eat Takeaway’s H1 Results
Walmart+ Launches New Travel Perks for Subscribers
Chart Time | Regional Delivery Market Performance
Amazon Isn’t Looking So Fresh in the U.K.
3PD | JET CEO Says Grubhub Sale Is “Proving Difficult”
International food delivery giant Just Eat Takeaway.com announced its results for the first half of the year, and while results improved in most regions — with its operating loss declining from €3,480B in H1 2022 to €258M this year — its American operations continue to be an albatross. From the moment JET swallowed up Grubhub in 2020 for $7.3B, the British-Dutch multinational seemed to have indigestion: the acquisition closed in June 2021, and the company was already contemplating divestment by April 2022.
The Big Picture: Despite launching new features for Grubhub+, the Chicago-based 3PD has slowly lost marketshare and bled cash, while JET leaders in London and Amsterdam seem unable or unwilling to make the necessary investments to compete with Uber and DoorDash. “We’re talking to buyers still, but it’s a very difficult M&A situation currently,” said CEO Jitse Groen. Evidently some activist investors think Grubhub is worth $4 billion, which is about what JET valued the subsidiary after a $3.1B write-down in late 2022. JET’s stock has wobbled since then, down slightly overall, so that seems like a princely figure for Grubhub, especially given the high cost of capital these days.
ECOMMERCE | Walmart+ Latest Subscription Idea: Travel
As it wages lifelong battle with Amazon Prime, Walmart+ — the Bentonville retailer’s subscription delivery service — continues to add new features to maintain parity or even best Bezos & Company. Amazon Prime gives you some TV shows? Walmart+ throws in a free Paramount Plus subscription AND ad-free Pluto TV. Amazon announces discounted membership for low income? Walmart+ offers it up too. Now Walmart+ is throwing something new into the bundle that’s beating AZ to the punch: discounted travel.
The Big Picture: Powered by Expedia Group’s White Label Template tech, Walmart+ Travel offers members 5% Walmart Cash back on hotels, vacation rentals, car rentals and activities, 2% back on flights, plus enhanced customer service. And unlike many company reward points, Walmart Cash can be turned into actual cash at in-store customer service. As it stands, Walmart’s ecommerce marketshare is still only about 1/6 of Amazon’s — but adding perks that help appeal to higher income shoppers means Amazon better not rest on its laurels.
WEBINAR | Tune in Thursday to Discuss Sustainability in Delivery
Join us on Thursday at 11 PT / 2 ET for an important discussion on the ways public and private organizations are working together to improve sustainability across the worlds of delivery and mobility. We’ll hear from top minds at Uber Eats, Perch Mobility, WXY Architecture + Urban Design, and San Francisco’s Environment Department. Register now.
CHART TIME | Just Eat Takeaway’s Regional Performance
As discussed above, JET just can’t get out of its North American slump. While performance was essentially flat or up in other territories, GTV (all numbers in billions of Euros) dropped from €2.9B in H1 2022 to €2.5B this year. Overall the company still has negative free cash flow, although it’s touting positive EBITDA as a positive signal. But for North America / Grubhub, that’s looks to be a symptom of it cutting investment to the bone, stalling growth potential.
GROCERY | Amazon Fresh Retrenches in the UK
Is Amazon shuffling the deck, or rearranging the deck chairs on the titanic? Despite pouring in billions of dollars in investment, its grocery ops in the U.S. have stalled, and now it appears things are going the same way across the pond. AZ announced it was closing 3 stores in the U.K., including one in West London that had only been open for about two years. That location, at Ealing Broadway, was the first to feature Just Walk Out checkout tech outside of the U.S.
The Big Picture: Much as in the U.S., Amazon barged into Britain with big grocery ambitions. It’s arguable that elements of its strategy make more sense in the U.K.: while Americans have been creeped out by the cameras and scanners that power the stores’ Just Walk Out tech, Brits are far more acclimated to CCTV monitors being all over their country. And as the country’s denser, the idea of using grocery stores as purpose-built hubs for delivery also has a certain appeal when it’s tough to otherwise plop down a huge warehouse. And yet, Amazon has still struggled. And with no legacy Whole Foods footprint to build off of and learn from, getting Brits to have their Marmite and Weetabix delivered is proving to be a particularly tough sell.
A Few Good Links
Uber Eats names UK restaurant of the year finalists. DoorDash rolls out limited CarPlay support for Dashers. Swiggy launches creditcard for customers, offers an impressive 10% cashback on delivery orders. (Note that only about 3% of Indians have a CC.) Hawaiian Airlines preps for Amazon cargo service. McD’s Q2 earning estimates. Chipotle launches ad campaign on Threads. FedEx pilots union rejects contract. LAX plans cargo transformation. Cafe workers look to unionize. Passport announces new President and interim CEO. Ex-Yum, Dollar General CFO heads to Zaxby’s
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