Starbucks announces partnership with GrubhubStarbucks announces partnership with Grubhub

Joanna Fantozzi

Starbucks and Grubhub announced a partnership on Thursday that would allow customers to order Starbucks delivery via the Grubhub app for the first time ever. The delivery partnership will roll out to select markets in Pennsylvania, Colorado, and Illinois in June, and expand to the rest of Grubhub’s markets across the 50 states by August.  

"Customer demand to get Starbucks delivered continues to increase, as evidenced by double-digit growth in the U.S. delivery business this past quarter, indicating that our customers continue to want convenience in their everyday lives," Meg Mathes, vice president of digital experiences at Starbucks, said in a statement. "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 provider."

According to Grubhub, Starbucks is the most searched merchant on its app that is not yet available. Overall, Starbucks has been slower to partner with third-party delivery companies than many other top chains in the foodservice industry. While the company began offering third-party delivery through Uber Eats in select markets in 2018, Uber Eats delivery was not available nationally until 2020. Starbucks did not begin offering delivery with DoorDash until last January, and the partnership was not expanded nationally until March 2023.

Related:Here’s why Dutch Bros is doing better than Starbucks right now

Grubhub is the final delivery company of the “big three” that Starbucks is now partnering with, though the company has the smallest delivery market share at 8% (as compared with DoorDash’s 67% and Uber Eats’ 23%), according to Bloomberg Second Measure.

"By joining forces with a beloved national brand like Starbucks, we're offering customers more of what they want on Grubhub while strengthening our enterprise offering and growing our merchant supply in markets nationwide," Liz Bosone, vice president of enterprise partnerships at Grubhub, said in a statement. "We're proud to offer national and independent restaurants on our platform — a complementary duo — to give customers more choices and build loyalty."

This partnership makes sense, given the growing popularity of the delivery channel with Starbucks customers. According to CEO Laxman Narasimhan, delivery business has grown 80% year over year, attributable to the company’s DoorDash partnership. However, there is room for growth in that channel, as delivery still only represents 2% of orders. In January, Starbucks announced a delivery partnership with startup GoPuff to tackle the demand for late-night and overnight deliveries.

Related:Why Starbucks is financially shaky right now

The Grubhub partnership also has the potential to alleviate some of the pain points the company is experiencing with meeting demand. Starbucks reported declining same-store sales last quarter for the first time in three years, and Narasimhan said that in addition to improving store efficiencies, Starbucks will continue digitizing its stores. A partnership with Grubhub could be a small step in the right direction of improving digital engagement and opening up omnichannel flexibility.

Contact Joanna at [email protected]