Starbucks Partners with Grubhub for Delivery Service to Increase Sales

Grubhub - Starbucks

Starbucks is partnering with Grubhub in an effort to boost sales after a challenging quarter. The coffee chain announced on Thursday that most of its beverages and food will be available through Grubhub starting in June.

The partnership is already live in Pennsylvania, Colorado, and Illinois, and other locations, with plans to expand nationwide by August. Prior to this, Starbucks customers could order via DoorDash and Uber Eats.

Delivery has been a positive for Starbucks as its sales have struggled. However, relying on third-party delivery providers like Grubhub carries risks.

Grubhub – Starbucks

Issues such as late deliveries or spills can lead to customer frustration with Starbucks, even if the company isn’t at fault. This could push customers to consider competitors next time.

In the quarter ending March 31, sales at US locations open for at least 13 months fell 3%, compared to a 12% increase the previous year.

Global revenue also dropped nearly 2% to $8.56 billion, falling short of analysts’ expectations. CEO Laxman Narasimhan described the results as “disappointing.”

Despite this, delivery orders grew by double digits. There were more orders than in the same period last year, and customers spent more per order.

Grubhub – Starbucks

“Customer demand to get Starbucks delivered continues to increase, as evidenced by double-digit growth in the U.S. delivery business this past quarter,” said Meg Mathes, vice president of digital experiences at Starbucks, in a statement Thursday.

Since the pandemic, more consumers have been opting for to-go, delivery, or pickup orders from cafes and restaurants.

Starbucks has introduced two-cup to-go trays and improved shopping bags to protect orders during delivery.

Besides expanding delivery access, Starbucks is also updating its app, adding new menu items, and testing overnight operations to try to jumpstart sales.

Nate O'Hara
Nathan is a seasoned commerce writer with a passion for unraveling the intricacies of the business world and distilling them into engaging narratives. During his academic journey, he delved deep into subjects like economics, marketing, and entrepreneurship, honing his analytical skills and developing a keen understanding of market dynamics.