Grubhub’s CEO discusses what’s in store for the food delivery market
Food order and delivery services like Grubhub have witnessed enormous growth over the past decade – and all the research points to that trend continuing. Millennials prefer to eat their restaurant fair at home, rather than out and about, and as they continue to increase their earning power, they continue to spend it on their favourite food delivery platforms. Grubhub was an early mover in this space, and continues to be at the forefront. Here’s where its CEO, Matt Maloney, sees the industry going in the near future.
Grubhub’s share price has appreciated by 66% so far this year
Source: Yahoo Finance
Regarding Grubhub, Maloney has no illusions over what led to its success – and he expects the same strategy to continue contributing to it: “We definitely had the first-mover advantage because we invented the category. We built these massive marketplaces where consumers would go online and find out which restaurants delivered to them, then place the order. We realized that at the scale we were executing, we could do delivery far cheaper and far more successfully than the restaurants. And, by executing the scale and GPS mobile-enabled technology, we were able to inflect a step change in the efficiency of restaurant delivery. By doing that, we see the market continue to grow.”
One of the biggest challenges the industry faces, according to Maloney, is the unwillingness of some restaurants to get involved. He says that the responsibility for changing their minds falls, ultimately, to people like him: “Transition is always hard. I understand what restaurants are thinking. This is a whole bunch of technology that you absolutely don’t want to do. The last thing in the world these management teams want to do is hire a chief technology officer and spend $100 million on building technology when they’re trying to eke out 1% same-store sales.
I think it’s up to leaders in my industry, myself and my team, to help restaurants figure this out, construct products that help them evolve through this digital transition, help them grow their business on a long-term, sustainable basis. Because right now, they’re stuck between a rock and a hard place.”
Dominion holds Grubhub in its Global Trends Ecommerce Fund.
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