2/27/2023 0 Comments Food places that deliverPlease email us at: the pandemic put thousands of establishments out of business, the US restaurant industry was growing 3 to 4 percent per year. If you would like information about this content we will be happy to work with you. We strive to provide individuals with disabilities equal access to our website. This exponential growth continued in 2020 and early 2021 to the point where these markets are now four to seven times larger than they were in 2018. The most mature delivery markets worldwide-including Australia, Canada, the United Kingdom, and the United States-grew twofold (in the United States) to as much as fourfold (in Australia) in 20 (Exhibit 1). In parallel, the emergence of rapid delivery/quick-commerce platforms that have themselves raised significant funding, such as Getir ($550 million in June 2021) and JOKR ($170 million in July 2021), adds a new class of competitors to the fight for “share of stomach.” Sizing the market As the landscape shifts further in the wake of the global pandemic, new challenges, opportunities, and decision points are emerging for a complex web of players-including delivery platforms, restaurants, drivers, consumers, and other tech enablers. Two recent IPOs-DoorDash in December 2020 and Deliveroo in March 2021-demonstrate the excitement and uncertainty still present in the sector. They’re still not making money,” Wall Street Journal, May 28, 2021, wsj.com.ĭespite such challenges, there are still major investments happening in the space, with recent fundraises, including Wolt (which raised $530 million in January 2021), REEF Technology ($700 million in November 2020), and Rebel Foods ($26.5 million in July 2020), and consolidation, including Uber’s acquisition of Postmates (for $2.65 billion in December 2020) and Just Eat Takeaway’s acquisition of Grubhub (for $7.3 billion in June 2021). Preetika Rana and Heather Haddon, “DoorDash and Uber Eats are hot. As DoorDash chief operating officer Christopher Payne told the Wall Street Journal recently, “This is a cost-intensive business that is low-margin and scale driven.” 1 And while the industry has experienced explosive growth during the global pandemic, delivery platforms, with few exceptions, have remained unprofitable. Potential regulatory constraints, including possible changes to how drivers are compensated, will figure into the reshuffling. Considerations such as brand, real estate, operating efficiency, breadth of offerings, and changing consumer habits will determine which stakeholders win or lose as the industry develops. Moving forward, it is poised to remain a permanent fixture in the dining landscape.Įven as the food-delivery ecosystem continues to expand, its economic structure is still evolving. Lockdowns and physical-distancing requirements early on in the pandemic gave the category an enormous boost, with delivery becoming a lifeline for the hurting restaurant industry. The advent of appealing, user-friendly apps and tech-enabled driver networks, coupled with changing consumer expectations, has unlocked ready-to-eat food delivery as a major category.
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