Just Eat 2

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Just Eat Takeaway has teamed up with Amazon in the US to offer free deliveries to millions of Prime members on orders with its embattled Grubhub service.

The commercial agreement, which starts today, gives Amazon a 2% stake in Grubhub and follows pressure from investors to find a partner for the US app.

The deal will allow Prime members across the US to sign up for a free, one-year Grubhub+ membership to access unlimited free delivery fees from hundreds of thousands of restaurants on Grubhub throughout the year. In addition to $0 delivery on eligible orders, Grubhub+ members get access to member-only perks and rewards.

Amazon will see its stake in Grubhub rise to 13% if the new partnership brings in enough new customers.

Just Eat said it expected the agreement to expand membership to Grubhub+ while also having a neutral impact on Grubhub’s 2022 earnings and cashflow, and add to its bottom line and cash position from 2023 onwards.

Grubhub CEO Adam DeWitt said the move would help the business continue to deliver on its long-standing mission to connect more diners with local restaurants.

“Amazon has redefined convenience with Prime and we’re confident this offering will expose many new diners to the value of Grubhub+ while driving more business to our restaurant partners and drivers.”

The commercial agreement automatically renews each year unless terminated by Amazon or Grubhub.

Just Eat added in the statement that it continued to “actively explore” a sale of Grubhub.

The group bowed to mounting investor pressure in April to look at the introduction of a strategic partner for Grubhub or explore a partial or full sale of the US food delivery app.

It bought the business for $7.3bn during the height of the pandemic-fuelled food delivery boom, but orders have since dropped off significantly and competition from the likes of Uber and DoorDash has heated up.

Worries over profitability have weighed on Just Eat’s share price, with Grubhub registering a pre-tax loss of €403m in 2021.

Shares in Just Eat rocketed 15.2% higher to 1,367.8p as markets opened this morning on the back of the news.

Morning update

Spirits group Distil has appointed a new commerical director and entered a new distribution agreement as part of moves designed to remodel the group for accelerated growth.

Alex Baker will join the business behind the RedLeg, Blackwoods and Blavod brands to take responsibility for directly managing major UK off-trade customers, as well as leading the continued drive to expand and open new export markets.

Baker recently held the position of business unit controller for grocery, ecommerce, convenience and discounters at Hi-Spirits.

He began his sales career at Nestle Purina and moved into the drinks industry with a role at William Grant & Sons, where he led the commercial delivery with retail partners including Sainsbury’s, Morrisons and Waitrose.

Distil also announced it is entering a new distribution agreement with Marussia Beverages UK, following the decision to withdraw its portfolio of spirits from long-term UK distributor Hi-Spirits.

The group said dedicating commercial resource internally through the creation of Baker’s position had enabled the “important change”, and would allow Distil to take direct ownership of servicing its major UK customers.

Executive chairman Don Goulding added: “This significant change represents part of a wider business remodel for Distil. Providing undistracted focus on Distil’s portfolio of brands, it will help us to manage cost increases more easily, and better serve our customers to deliver accelerated growth plans.”

The FTSE 100 bounced back from yesterday’s drubbing to rise 2.4% to 7,192.75pts this morning.

Early risers included Ocado, up 4.2% to 839.2p, SSP Group, up 4.1% to 241.8p, and Naked Wines, up 4.1% to 169.3p.

Science in Sport, Kerry Group and Devro were among the fallers, down 1.7% to 45.2p, 0.4% to €96.20 and 0.3% to 178.8p respectively.

Yesterday in the City

Recession fears continued to plague UK markets as the FTSE 100 plunged 3% to 7,019.62pts yesterday.

Sainsbury’s, which painted a bleak picture of the squeezed consumer, held up well amid the wider sell-off, rising 1.3% to 211p as it performed slightly better than expected in its first quarter.

B&M European Value Retail fell 1.8% to 359.1p as it announced the appointment of Mike Schmidt as new CFO.

Glanbia and Bakkavor escaped the pessimism to rise 6.6% to €10.35 and 3.3% to 94.2p respectively, while Ocado increased 2.6% to 805.4p, Deliveroo was up 2.9% to 92.8p and Vrigin Wines UK rose 1.9% to 79p.

Fallers included Parsley Box, down 5.3% to 17p, THG, down 5.3% to 76.2p, and Associated British Foods, down 4.4% to 1,526.5p.