Hot food delivery businesses get interest from business giants

Ride hailing and delivery giant Uber is in talks to buy US on-demand, hot food delivery company GrubHub.

Uber made an offer on GrubHub earlier this year but negotiations are ongoing. GrubHub is not the only hot food delivery business that is being targeted by a multibillion dollar giant, and according to global law firm Linklaters share prices in such companies have leapt by an average of 12% while the STOXX Europe 600 Consumer Services index has fallen by an average of 12%.

One of the draw of hot food delivery businesses to big buyers is that thanks to restaurant delivery drying up due to lockdowns around the world, many have diversified into convenience store and supermarket grocery deliveries. Long-term this could make the companies very appealing as when they return to full profit at the end of the lockdowns, this will be an additional service that will add to their profitability and viability.

One of the upshots of the interest in hot food delivery businesses has been interest from competition and markets authorities that seek to maintain competition in this relatively new sector. The UK government has just approved the merger of JustEat and Takeaway, and the investment from Amazon in rival business Deliveroo. This new sector needs to be competitive in the eyes of such authorities and giants gobbling these companies up could face limits from governments.