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story.lead_photo.caption FILE - This Feb. 20, 2018, file photo shows the Grubhub app on an iPhone in Chicago. Food delivery service Grubhub is considering a possible sale of the business as competition intensifies in the sector. The Wall Street Journal reports that the company is looking at its strategic options. Grubhub competes in a sector filled with players including Uber Eats, DoorDash and Postmates. Consolidation in the industry is expected. (AP Photo/Charles Rex Arbogast, File)

Big changes could be coming to the food delivery business, where companies have been struggling with high costs and fickle consumers.

Grubhub Inc. — the second-largest player in the U.S. market by sales — is considering putting itself up for sale, the Wall Street Journal reported late Wednesday, sending shares up almost 13 percent. The stock continued to climb 1 percent to $55.33 Thursday on the news.

Chicago-based Grubhub said it would not comment on speculation.

Grubhub, founded in 2004, was a pioneer in the sector. But since then, it’s been joined by Uber Eats, DoorDash, Postmates and others. As of November, DoorDash claimed 37 percent of the U.S. delivery market, while Grubhub held 30 percent, according to Second Measure, a data analysis company. Uber Eats had 20 percent share.

Still, Grubhub is the leader in some key markets, including New York, Chicago and Boston.

The companies are finding that customers jump freely between services to find the best deal, making it difficult to deliver stable sales numbers. Aggressive discounting and heavy marketing costs to win new users have also taken a toll on profits.

Grubhub has also been left out of some big deals. McDonald’s began offering delivery through Uber Eats in 2017 but didn’t add Grubhub as a partner until last fall. Chipotle has a partnership with DoorDash.

In October, Grubhub reported a third quarter profit of $1 million, down from $22.7 million in the prior year, even though its revenue rose by 30 percent.

At the time, GrubHub slashed its full-year revenue expectations and cautioned on competition, sending its shares tumbling 43 percent. In a letter to shareholders, Grubhub said customers have become “more promiscuous,” using multiple delivery services.

And the services are fighting over a limited number of customers, for now. Delivery represents only about 3 percent of all restaurant orders, according to NPD Group, a market research firm. However, that’s expected to grow by double digits this year.

Consolidation has happened before in the delivery market. Grubhub merged with Seamless in 2013. DoorDash bought upscale service Caviar last spring. In Europe, rivals Takeaway.com and Just Eat are in the midst of a merger.

However, Morgan Stanley analyst Brian Nowak said more consolidation is necessary. A bigger company could optimize driver routes, rely less on discounting and make more deals with big chains, which pay lower rates.

“The runway is long, but generating cash flow in a highly competitive food delivery industry is challenging,” Nowak said in a note to investors.

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