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GrubHub picks up delivery sites in mobile-ordering land grab

GrubHub’s acquisition of two online delivery sites that are optimized for mobile devices, DiningIn and Restaurant on the Run, points to the company’s growing focus on ramping up mobile ordering as leading brands such as Taco Bell and Starbucks continue to roll out similar offerings.

GrubHub also announced that its year-end financial results surpassed expectations, with more than 200,000 orders sent daily to its restaurant partners, and more than five million active diners counted among its customer base. The company finalized its acquisition of DiningIn, an online food ordering service with a mobile Web site, and is in the process of acquiring similar service Restaurants on the Run.

“Mobile ordering is an essential part of GrubHub as more than half of all orders are placed through mobile devices,” said Meghan Gage, senior public relations associate at GrubHub, Chicago, IL. “Entering into the delivery space with these acquisitions will offer more transparency for orders and restaurants.

“We are able to share these benefits across all types of devices, particularly mobile.”

Competing with other brands
While GrubHub will be competing with other top brands’ mobile ordering strategies in 2015, it has the advantage of offering a plethora of different types of food and restaurants to consumers, whereas ordering from a specific restaurant only yields a singular type of food.

After GrubHub’s acquisitions are completed, it will be able to carry out deliveries on the behalf of nearly 3,000 restaurants across the nation, in major cities such as Las Vegas, Los Angeles, Houston, Dallas, Chicago, San Diego, Philadelphia, Boston, Minneapolis, Seattle and San Francisco.

GrubHub hopes to gain more insights about consumer behaviors due to the additional visibility it will receive in each order, and believes that it will increase potential dining choices for customers by offering delivery options to locations that may not provide such services themselves.

The popularity of food delivery apps including GrubHub and Seamless is on an upwards trajectory, especially during inclement weather events such as January’s winter storm Juno (see story). Food and beverage experts claim that their rise will actually positively affect in-store commerce and augment awareness of restaurants that users may not have been privy to otherwise.

Increasing profits
GrubHub’s fourth quarter revenue clocked in at $73.3 million, up 50 percent from its 2013 fourth quarter earnings. The company also saw a 47 percent increase in amount of active diners year-over-year.

Meanwhile, its gross food sales rested at $1.8 billion, up 39 percent from the $1.3 billion seen in 2013.

With the acquisitions of DiningIn and Restaurants on the Run, GrubHub will likely be even better-positioned to enjoy higher revenue in 2015. A more significant impact could also be likely if the brand devotes even more focus to mobile ordering applications, which would help keep it on the same level as other mobile pioneers in the food and beverage sector, including Starbucks and Taco Bell.

Consumers have been shown to gravitate towards mobile ordering apps due to the customization of items they provide, and the streamlined checkout process thanks to third-party mobile payment solutions such as Apple Pay and Softcard.

GrubHub remains committed to bolstering its mobile efforts in 2015 and maintaining its spot as a top ordering service.

“While we don’t have additional figures to share, mobile remains a key channel for connecting our hungry diners with local takeout restaurants,” Ms. Gage said.

Final Take
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York