Amazon.com (AMZN.O) announced on Thursday that its U.S. customers can now order from Grubhub directly through its shopping app and website. This extension of their existing partnership enhances the deal that already offers Prime members no-fee access to Grubhub+ membership.
Under this agreement, Amazon Prime members will continue to enjoy a free Grubhub+ membership, valued at $120 annually. This membership includes benefits like free delivery on orders over $12. This integration is set to provide a seamless ordering experience for Prime users.
Amazon’s collaboration with Grubhub, owned by Just Eat Takeaway.com (TKWY.AS), began in 2022 with an initial one-year agreement, which was extended for another year in 2023. The new arrangement further strengthens this partnership by bundling the Grubhub membership with Prime and incorporating it into Amazon’s app and website. According to Amazon, this benefit will be available to loyalty users “every year thereafter as long as they remain with Prime.”
Prime membership in the U.S. costs $139 annually and offers a wide range of benefits. These include free delivery, gaming perks, savings and discounts 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. In a related development, Just Eat Takeaway announced that Amazon has received warrants representing 4% of Grubhub’s equity and could receive warrants for an additional 10% based on certain performance criteria.
Sean Kealy, an analyst at Panmure Gordon, noted the strategic implications 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,” Kealy said.
According to data platform Statista, about 167 million Amazon customers in the U.S. were subscribed to Prime in 2023, representing approximately 71% of all users in the country. This expansive user base highlights the significant reach and potential impact of the integrated Grubhub service.