Consumers are changing their food delivery habits amid economic concerns and as the industry evolves from the growth seen during the pandemic.
Consumers continue to spend more Largest food delivery app
door dash<span class="company-name-type"> Ltd.</span> dash <span>-3.26%</span> and Uber Technologies<span class="company-name-type"> of the corporation</span> uber <span>0.78%</span> Analysts and industry executives say Uber Eats' growth is slowing and consumers are spending more cautiously. People are switching to in-store pickup, ordering fewer dishes and changing what is delivered, they said.</p><div> <p>“Most people have a budget,” DoorDash chief financial officer Prabir Adarkar said in an interview last month. Delivery "continues to be part of their daily routine. They're just coordinating their behavior," he said. Some consumers are shifting from expensive restaurants to fast food, while others are ordering fewer items at restaurants. Restaurant executives say some customers are picking up more food to avoid delivery charges. "As wallets get a little tighter, more people are ordering on their phones and picking up food to take home," says Wendy's.<span class="company-name-type"> Ltd.</span> CEO Todd Penegal said in an interview: <div data-layout="inline " data-layout-mobile="" class=" media-object type-InsetMediaVideo inline
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</div> Food delivery apps have become popular during the Covid-19 crisis. DoorDash and Uber Eats together control his 90% of the U.S. food delivery market and continue to record sales growth. But overall industry growth is slowing. Orders on major food delivery apps DoorDash, Uber Eats and Grubhub grew an average of 5% year-over-year in October and November, the slowest growth in two months since the pandemic, according to market research firm YipitData. did. Track your emailed receipts. Spending increased an average of 9% year-over-year over the same period, also his slowest pace in over two years. Grubhub, America's third-largest food delivery app, is seeing a decline in orders and spending. European owner Just Eat Takeaway.com NV has been considering selling his Grubhub since April. DoorDash's stock is down 69% this year, nearly double the 35% decline of the tech-heavy Nasdaq Composite Index. Shares of Just Eat are down about 58%, while shares of Uber, which also has a ridesharing business, are down about 41%. Most analysts predict continued growth for DoorDash and Uber Eats. Gordon Haskett Research Advisors analyst Robert Mollins said the drop in traffic to his website on DoorDash this quarter means lower order volumes than other analysts expected. said to suggest. "They've been at the mercy of macroeconomic pressures for a little while, especially for low-income consumers," Morrins said. A DoorDash spokesperson said the company consistently exceeds market expectations. Forecasts based on app downloads, web visits and email receipts "often failed to accurately estimate our growth," he said in an email. Last month, DoorDash predicted a 27% year-over-year jump in spending this quarter. It does not predict orders. DoorDash and Uber Eats are trying to attract more customers with holiday deals on their membership programs that include discounts on meals and delivery charges. Uber is giving away his 50% discount on annual memberships. Subscribers typically shop more, order more often, and bring recurring revenue to your app. Cost-conscious consumers are increasingly buying subscriptions to save money, according to the app. According to Uber Eats, subscribers accounted for 40% of U.S. orders so far in December, up from 27% in the same period last year. Grubhub has expanded options to allow groups to combine multiple orders to save on shipping costs. Companies are cutting costs. DoorDash laid off about 1,250 employees late last month. Uber earlier this year<strong> </strong>It said it would cut marketing spending and suspend hiring. DoorDash CEO Tony Xu wrote in a memo to employees apologizing for the layoffs: . Fast food chains' delivery orders through apps and restaurants' own channels fell 11% in the 12 months to November compared to the same period last year, according to market research firm NPD Group, which collects data from restaurant chains. Did. As NPD's data shows, pick-up orders were the only takeout business avenue during that period. Restaurant chains say their customers, especially low-income diners, are ordering cheaper or fewer items. Chain like Shake Shack<span class="company-name-type"> Ltd.</span> It said it was losing orders from low-income customers and expects this trend to continue. Tex-Mex chain Tues Holdings, meanwhile, told investors that take-home alcohol sales were down. 'This is just part of a general move to return to pre-Covid behavior' Chipotle Mexican Grill<span class="company-name-type"> Ltd.</span> CEO Brian Niccol said in an interview: Write to Preetika Rana ([email protected]) and Heather Haddon ([email protected]). </div><p style="position: absolute;z-index:-1;top:0;left:-15000px;">Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8</p>