Starbucks expands US delivery with new Grubhub partnership

Grubhub operates in over 4,000 US cities | Photo credit: Grubhub

Starbucks is strengthening its US delivery channel in a bid to lift flat sales in its largest market. A new partnership with Chicago-based Grubhub will commence in the states of Pennsylvania, Colorado and Illinois from June 2024 before being rolled out across all 50 states by the end of August 2024 – adding to the chain’s existing Uber Eats and DoorDash US delivery network.  
 

Starbucks has been keen to develop its delivery channel in the wake of stalling US sales. Starbucks posted marginal year-on-year US sales growth – its largest market with 16,600 stores – for the three months ended 31 March 2024 to reach $5.9bn, with like-for-like sales declining 3%. 

“Customer demand to get Starbucks delivered continues to increase, as evidenced by double-digit growth in the US delivery business this past quarter. Our new partnership with Grubhub will help fuel this growth by increasing availability of Starbucks products to Grubhub’s tens of millions of customers, via a leading delivery provide,” said Meg Mathes, Vice President of Digital Experiences, Starbucks.   

Despite accounting for approximately 2% of total US transactions, Starbucks’ delivery sales continue to grow at a strong rate. In a first quarter investor call, Starbucks CEO Laxman Narasimhan said the chain’s US delivery segment had achieved record 80% year-on-year sales growth.  

In May 2024, Narasimhan told investors that a pilot delivery programme to serve customers between 5:00pm and 5:00am, when the majority of its company-owned stores are traditionally closed, had doubled delivery sales and would be rolled out further this year. 

“Building off that success, we are aggressively pursuing options to build a $2bn business over the next five years. Overnight opportunities are incremental and create a complement to our existing delivery business,” he said. 

Starbucks has previously mooted the idea of introducing delivery-only sites in the US to cater to demand for the service and remove the complexity of staff having to manually manage orders from in-store, drive-thru and delivery channels. 

Founded in 2004, Grubhub was acquired by Dutch delivery giant Just Eat for $7.3bn in 2021. The business operates in over 4,000 US cities and counts Dunkin’, Bluestone Lane, Pret A Manger, The Coffee Bean & Tea Leaf, Joe & The Juice, Paris Baguette and Gregorys Coffee  among its café brands.