Amazon.com (AMZN.O) has announced that U.S. customers can now order from Grubhub directly on its shopping app and website, extending a deal that provides Prime members with no-fee access to Grubhub+ membership.
As part of the enhanced agreement, Amazon Prime members will continue to enjoy a complimentary Grubhub+ membership, valued at $120 annually. This membership offers free delivery on orders exceeding $12. The integration of Grubhub services into Amazon’s platform aims to streamline the food delivery process for Prime members, making it more convenient to order meals alongside their regular Amazon shopping.
The initial collaboration between Amazon and Grubhub, owned by Just Eat Takeaway.com (TKWY.AS), was established in 2022 for a year and extended through 2023. With this new agreement, the Grubhub membership is bundled with Prime and fully integrated into Amazon’s app and website. This benefit will continue to be available to loyal Prime users each year as long as they maintain their Prime membership.
Prime membership in the U.S., which costs $139 annually, offers a variety of perks including free delivery, gaming benefits, savings on medical prescriptions at nearly 60,000 pharmacies, and access to Amazon Music, Prime Video, and Prime Reading.
In July 2022, Amazon secured the right to purchase a 2% stake in Grubhub. According to a separate statement from Just Eat Takeaway, Amazon has received warrants representing 4% of Grubhub’s equity and could potentially receive warrants for an additional 10% based on certain performance conditions.
Sean Kealy, an analyst at Panmure Gordon, commented on the strategic impact of this deal: “The important impact of this deal is that it makes Grubhub more attractive to a potential buyer, as Just Eat Takeaway has been attempting to sell it for some time now – since shortly after it made the initial acquisition.”
Amazon’s Prime service continues to be a significant driver of customer loyalty. In 2023, about 167 million Amazon customers in the U.S. subscribed to Prime, representing approximately 71% of all users in the country, according to data platform Statista.
The integration of Grubhub into Amazon’s platform marks a strategic move to enhance the value of Prime membership, potentially increasing customer retention and satisfaction. It also positions Grubhub favorably in the competitive food delivery market, offering a seamless experience for millions of Amazon users.
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