This decision comes as no surprise. Unlike Seamless, Eat24 didn't have the same brand identity with its core customers. If there's no potential customer blowback, it makes more sense to convert those users over to Grubhub.
— Erika Adams
In between revealing the LevelUp acquisition and posting revenues that were up 51 percent year-over-year in its second quarter earnings report, Grubhub also announced that it would be shuttering the Eat24 brand. The shutdown won’t be finalized until later this year, after the majority of Eat24 users have migrated over to Grubhub’s platform.
“When we completed the acquisition of Eat24 in late 2017, we discussed the trade-offs of supporting a third brand in our portfolio,” Grubhub CEO Matt Maloney said on the company’s most recent earnings call, referring to Grubhub, Seamless, and Eat24. “Since then, we’ve completed an extensive brand study with thousands of diners in many of our markets in order to determine the best path forward. What we found was that the incremental value of maintaining Eat24 as a third brand did not justify the additional cost. So, we’ve made the difficult decision to sunset the Eat24 brand later this year.”
In a followup explanation on the decision, a Grubhub spokesperson provided further details on the brand study that the company conducted that led to Eat24’s shutdown.
“This was a difficult choice given Eat24’s strong voice and beloved sense of humor, but the study uncovered remarkable similarities, and those surveyed found few points of differentiation between the Eat24 and Grubhub brands,” the spokesperson told Skift Table in an email, explaining that the shutdown will happen gradually throughout the rest of 2018. “Diners already see little difference between the Eat24 and Grubhub user experiences, and we’ve worked hard to provide access to all the same restaurants, recommendations and functionality.”
Essentially, diners were not sufficiently attached to the Eat24 brand. Many Eat24 users are located in San Francisco, where the delivery options are plentiful and diners were not loyal enough to Eat24 specifically. If Grubhub were to make the same move with Seamless in New York, however, that would likely be a different story.
The spokesperson confirmed that there would be no layoffs associated with the shutdown. “The majority of Eat24 employees have already transitioned to roles within Grubhub in our San Francisco office, and some were given the chance to relocate to another office. There have been no layoffs as a result of the brand sunset, and we continue to have an office and employees in San Francisco.”