Amazon strengthens partnership with Grubhub to enhance food delivery services

Amazon (AMZN) is ramping up its food delivery offerings for Prime members by partnering with Grubhub to provide free access to Grubhub+, a $120-a-year subscription service. This move comes as Amazon seeks to enhance its subscription revenue and bundled services in the face of increasing competition from other merchants and retailers.

With this new partnership, Prime members will enjoy free deliveries on eligible orders and lower service fees through Grubhub+. Additionally, Amazon customers and Prime members can now conveniently order from Grubhub directly on Amazon’s website and app.

The expansion of Amazon’s food delivery services through Grubhub complements its existing offerings, which include nonperishable food delivery, grocery delivery through Amazon Fresh and Whole Foods, and now takeout through Grubhub. CEO Andy Jassy highlighted the growth of both the nonperishable and grocery businesses during Amazon’s latest earnings call.

Retail analyst Neil Saunders noted that Amazon’s move to offer the Grubhub perk is a strategic way to make Prime a comprehensive membership program that caters to various needs, including food delivery. Amazon Vice President Jamil Ghani emphasized that Prime is evolving to encompass convenience, savings, entertainment, and now food delivery, making it a one-stop shop for busy households in the United States.

While speculation swirls about the possibility of Amazon acquiring Grubhub, Ghani declined to comment on the matter. However, he emphasized that the partnership with Grubhub is part of Prime’s ongoing evolution to provide value to its members. This latest development underscores Amazon’s commitment to enhancing its services and offerings to meet the diverse needs of its customers.