Food
Delivery
RIEGO, JANELLA MAE C.
BSCMM- 2Y2-3B
Demand for Food
Delivery
With more people stuck at home due to the COVID-19
outbreak, there has been a surge in demand for food
delivery services. Since dine-in is no longer an option,
consumers are turning to delivery to treat themselves
during the days of social-distancing. Many delivery
services such as Deliveroo, JustEat, Postmates and
UberEats have responded to the crisis by introducing
contactless delivery options to eliminate the risk of
spreading the virus between the customer and driver.
The food delivery market has seen
significant growth over the past five years.
Led by platform-to-consumer services,
such as DoorDash and Uber Eats, food
delivery has expanded from takeaways to
anything and everything, adding billions of
dollars in potential revenue capture.
The network effects of more delivery riders,
alongside route optimisations technologies,
has enabled faster and cheaper delivery.
This has created a flywheel effect for many
of the food delivery operators, which
continue to undercut competition on razor
thin profit margins as they battle for market
share.
The past few years has also seen more
Food
consolidation, as the larger businesses attempt to
reduce the amount of competition in the market.
COVID-19 has propelled the industry a few years
Delivery into the future, as millions of people in lockdown
ordered food online for the first time. Grocery
Revenue and
delivery service Instacart said it achieved its 2022
goals in the third week of lockdown.
Uber Eats, Deliveroo and DoorDash have all
Statistics reported a massive acceleration in orders between
February and March, as the world went into
lockdown.
Food While this surge in demand may cool off once we
Delivery
return to normality, food delivery operators expect it
to have a somewhat lasting effect.
In this sector analysis, we will look into operations
Revenue and in the China, Europe, United States and United
Kingdom. China, the US and the UK are the three
Statistics largest individual countries for food delivery,
Europe, primarily from Germany, Italy and Spain, is
an emerging market which could surpass the US in
a few years.
Zachary Davis, owner of The Glass Jar restaurant group in
Santa Cruz, Calif., said he intentionally avoided working
with food-delivery apps before the COVID-19 pandemic
because the costs to his business just seemed too high.
But when his county issued shelter-in-place orders, “we
The pandemic has were effectively shut down. We closed for a couple of
days, took stock and realized it was the only way to keep
more than doubled our business open,” he told MarketWatch.
Davis is not alone. Delivery apps have become more
food-delivery apps’ important for both business owners and their customers
as more people order takeout and groceries during the
business. Now coronavirus pandemic. DoorDash Inc.’s DASH recent filing
what? for an initial public offering and earnings reports from
Uber Technologies Inc. UBER, +0.24%, Grubhub Inc.
GRUB, -0.17% and Postmates have provided a deeper
look into delivery apps’ business in 2020, and it is clear
the pandemic has given the industry a big boost.
The four companies raked in
roughly $5.5 billion in combined
revenue from April through
September, more than twice as
much as their combined $2.5 billion
in revenue during the same period
last year.
Food Delivery
Regulations
The decline of brick-and-mortar restaurants in the City over the past five years coincides
with the rapid rise of third-party food delivery services, businesses that process food
delivery and pickup orders through mobile apps and websites. According to one
consumer market outlook publication, revenue in the U.S. “platform-to-consumer delivery”
market was $8.7 billion in 2019, a nearly 10% increase over the same segment’s
valuation in 2018. Market research data from the first quarter of 2020 shows
approximately 15.9% of all U.S. residents utilized third-party food delivery services at
least once in the past year, many on a regular basis, and industry experts expect that
percentage to continue to increase. Percentage use is even higher in urban markets such
as San Francisco, and the COVID-19 crisis has driven the usage rates higher still. This
booming market is highly concentrated in just a handful of businesses. As of November
2019, just four third-party food delivery services controlled approximately 98% of the
entire market.
