According to a new report, food delivery apps such as Doordarshan, GrubHub and Uber Eats lost $ 19 billion due to the epidemic.
The crowded food-app industry was poised to lead its skyrocketing growth in 2020, when sales rose by only 38 percent compared to a 71 percent jump in 2019.
According to a study given to the research website Social Sciences Research Network on Thursday, it was rescued by coronovirus lockdown orders and frightened eaters.
Sales rose 122 percent to $ 51 billion, compared to $ 23 billion in sales last year in 2019, as the epidemic lockdown forced people to take over more often, researchers say Daniel Minh McCarthy, Emory University’s Googita business Is a marketing professor at the school and Columbia University. PhD candidate Elliot Shin Oblander.
According to the study, the vast majority of that growth, or 69 percent, came from artificial demand expected to be largely extinct in the form of epidemics, which tracked a total of 27 delivery apps, including GrubHub, Doordarshan and Uber Eats.
“Wall Street is pricing such growth in these companies, but we know there will be a headwind to come,” McCarthy told the Post of his research.
The study is based on spending data from a five-year credit card, a data analytics firm that tracks card spending, spending data on 1.8 million consumers for a report.
McCarthy said the data shows that “when dine-in visits increase, deliveries in the same area will decrease on the same day and vice versa.”
This means, he says, that people were not eating much. They were just ordering more – resulting in “a large transfer of funds from restaurants to delivery companies” which is expected to be disbanded this year.
McCarthy is no newbie to influential reports. In 2017 his research on Wayfair losing money and Blue Apron’s struggle was widely cited in the trade press.
Some large, publicly traded food delivery apps already appear to be hanging on due to the recession. In February, Doordarshan said it expects total orders for 2021 to grow by 33 percent after reporting a total order growth of 233 percent for the fourth quarter alone.
The company said at the time, “Our approach predicts a successful rollout of COVID-19 vaccines.” “While we cannot predict the short or long-term effects on consumer behavior, our guidance assumes that this creates a headwind for increases in total orders and average order values.”
Uber on Wednesday introduced a number of features to better integrate its food-delivery service with its ride-hailing service in an apparent effort to meet demand. Users will be able to pick up food and wine while on an Uber trip through the “Pick Up and Go” options.
Experts say investors should be prepared for the 2019 ruin of the industry to make a full comeback this year, including stock volatility and a multitude of consolidations.
Epidemic analyst Dan Ives said that before the epidemic, the food delivery app “hit the growth wall because everyone was saturated.” “They knew that the only way to compete was to cut costs and consolidate.”
This year, Ives concluded, “there will be some development challenges ahead and the food distribution industry will need to adjust to moderate growth.”
However, demand still continues to increase. GrubHub said on Wednesday that revenue grew 52 percent in the first quarter, while it grew 41 to 53 percent in the previous three quarters.
Doordash and Uber declined to comment for this article and GrubHub did not respond to a question.
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