After it initially made restaurants participating in a discount program foot the bill, Grubhub on Thursday said it would be changing the program to cover the discount — for up to 25 orders per restaurant.
Grubhub’s Supper for Support promotion offers diners $10 off an order of $30 or more placed via Grubhub between 5 and 9PM during the month of April. Under the original terms of the deal, however, restaurants that opted in were expected to cover both the $10 discount and Grubhub’s commission on the undiscounted order total, not the lower amount the customer actually paid.
After withering criticism and backlash for a “promotion” which appeared to take advantage of struggling restaurants, Grubhub said Thursday it’s putting $30 million toward Support for Supper, giving each participating restaurant a measly $250 to cover the cost of the per-order discount. After that $250 is spent, it appears the restaurants are once again on the hook to make up the difference.
Grubhub spokesperson Dan Abernethy said in an email that participating restaurants decide upfront whether they want to fund the additional discounts, which he said was clearly communicated to them. He added that “like all Grubhub promotions, commissions are calculated on the pre-promotion total.”
Abernethy said that there had been some confusion about Support for Supper which he said was “an entirely optional initiative to drive more business to restaurants,” that had been so successful that Grubhub was “doubling down on the promotion.”
Grubhub, which reported revenue of $341 million and gross food sales of $1.6 billion for the fourth quarter of 2019, says it anticipates the funding for the Support for Supper promotion “will help generate at least $100 million in restaurant sales.” It claims that restaurants participating in its promotions during the COVID-19 pandemic have seen up to a 30 percent increase in sales. More people are ordering delivery from restaurants, many of which are closed due to social-distancing restrictions. A report from restaurant review platform Yelp estimates that restaurant delivery was up 300 percent in the past month.