Amazon’s Grubhub deal is delivering big results

Amazon and Grubhub are entering the second year of a five-year commercial agreement that gives Amazon Prime members access to the food delivery platform’s subscription program at no extra cost.

As part of the deal, Grubhub’s ordering tab was integrated directly into the Amazon app and website, allowing users to order burritos while shopping for face wash or streaming a show. That seamless experience appears to be paying off, say company executives.

“Amazon Prime customers are a very engaged customer cohort,” says Jamil Ghani, Amazon’s worldwide vice president of Prime. More than nine out of 10 orders on Amazon.com or in the app are coming from Prime members returning to the order experience, the company says. Amazon plans to add food delivery through its Alexa+ service later this year, Ghani says.

THIRD PARTY BOOST

The collaboration arrives at a time when many companies are enhancing their subscription offerings. Amazon is competing with loyalty programs from Walmart and Target, hoping that added perks like Grubhub+ increase the appeal of its $139-a-year Prime membership.

Amazon reported better-than-expected earnings for the first quarter of this year, though it is one of the many retailers caught up in President Donald The President’s aggressive tariffs. Shares of the company were up almost 11% from this time a year ago, though they’ve decreased 7.8% year to date.

“The main benefit to Amazon of the Grubhub partnership is that it helps underscore the value of Prime outside all the benefits Amazon offers via its own services,” GlobalData managing director Neil Saunders tells Fast Company. “Grubhub is a very complimentary service as meal delivery and pickup is not something Amazon does itself.”

Grubhub operates in the same competitive space as Uber Eats and DoorDash—both of which also have loyalty programs bolstered by third-party deals, with companies like Delta and Chase, respectively. Although Grubhub’s market share has declined steadily since 2021, integration with Amazon has introduced the platform to new users and increased awareness of Grubhub+.

A Grubhub+ membership otherwise costs $120 a year and gives users $0 delivery fees and lower service fees. The companies claim that Prime members who use the service “save an average of $300 per year.”

Amazon declined to share specific numbers on signups, but the company said there’s a more than 50% year-over-year increase in Grubhub+ signups since it integrated the platform

“For Grubhub, the partnership expands the audience and the number or orders it fulfills,” Saunders says. “Amazon has a huge reach and Grubhub has been able to tap into this.”

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