Grubhub announced on Thursday the launch of Ultimate, a platform leveraging both software and hardware to enable restaurants to offer customers the convenience of ordering their food online or through an app for pickup. The competition among food delivery services has expanded to include a new arena: digital pickup.
Founder and CEO Matt Maloney emphasized that Grubhub is targeting small- and medium-sized restaurants with this technology. He highlighted the increasing expectation among diners for ordering ahead to breeze through busy rush hour crowds or grab a quick meal, a convenience typically associated with large quick-service restaurants (QSRs). Ultimate aims to extend this convenience to restaurants of any size, providing diners with an easy, digital pickup experience.
The Ultimate platform is currently undergoing testing at three Chick-fil-A locations, Ohio State University, and over 100 restaurants in the New York City and Chicago areas.
According to market researcher the NPD Group, pickup orders account for more than 50% of takeout sales industry-wide and 58% of all digital orders. Moreover, pickup orders are experiencing faster growth than dine-in orders, with a 32% increase last year compared to 15.5% for digital delivery.
Despite this growth, the average order size for pickup has declined in recent years, similar to the trend observed in delivery. However, pickup orders remain a significant portion of the overall food industry, with approximately $350 billion spent annually on food purchased from restaurants, according to Morgan Stanley.
Grubhub, once the market leader in food delivery, has faced increasing competition from rivals like DoorDash and Uber Eats. Providing a new tool for pickup orders through Ultimate could help Grubhub regain market share. Currently, less than 10% of Grubhub’s orders are pickup.
This move by Grubhub aligns with the broader trend of restaurants focusing more on pickup orders. For example, Domino’s Pizza has been emphasizing its carryout business, which can be more profitable as it doesn’t require delivery drivers.
Ultimate, which has been in development for five years, offers a comprehensive system for restaurants, including point-of-sale hardware integrated with the Grubhub app, customer displays for real-time order estimates, software for kitchen staff, and kiosks for in-restaurant ordering. Padma Rao, vice president special projects at Grubhub, emphasized that Ultimate aims to provide customers with various ways to interact with restaurants while enhancing their overall experience.
