Netflix isn’t the only business that enjoyed boom times during the pandemic but is now facing headwinds.
The European food delivery giant Just Eat Takeaway.com, which purchased U.S. delivery service Grubhub about a year ago, says it’s now looking to unload the company.
Just Eat Takeaway.com said it’s bowing to pressure from investors who see Grubhub as a drag on earnings.
“As such,” the company’s board said, “management is currently, together with its advisers, actively exploring the introduction of a strategic partner into and/or the partial or full sale of Grubhub.”
If a sale is realized, it probably would represent a loss for the European company, which spent $7.3 billion acquiring Grubhub.
Since the purchase, Just Eat Takeaway.com has lost more than two thirds of its market value.
The pandemic was a boon to services such as Grubhub and Instacart that helped Covid-wary shoppers keep bellies full and pantries stocked without setting foot in a restaurant or supermarket.
The simple fact, however, is that delivery isn’t cheap, and any economies of scale these services enjoyed in past years is evaporating as consumers venture forth once again.
Netflix, meanwhile, is getting pounded by investors after reporting that it lost 200,000 subscribers in the first quarter — its first such decline since October 2011.
The company says it could lose 2 million more subscribers in the current quarter.
As I’ve reported, many consumers are now seeking ways to economize amid soaring prices for food, gas and other necessities. Cutting back on streaming services is one easy and effective way of doing that.
Netflix says it’s hoping to turn things around by cracking down on shared passwords and possibly introducing an ad-supported service at a lower price than its current ad-free offerings.
We’ll have to see what they deliver in that regard.