Pandemic lockdowns and restrictions led to a drastic shift in consumer habits. Instead of dining out or shopping in stores, Americans increasingly turned to online delivery services to retrieve their meals and groceries. Now, even as restrictions ease, consumers are still utilizing these apps and paying for the convenience of having whatever they need delivered on demand.
This sudden change in consumer habits fueled a highly competitive industry. DoorDash (with 58% of the market share), Instacart (8%), Uber Eats (8%), and Grubhub (2%) are not the only players with a seat at the table. Now, convenience stores and grocers are jumping into the space as well. Investors may have doubts about the ultimate profitability of these companies, given that so many are operating on tight margins. Undoubtedly, the industry is booming, and new customers continue to sign up.
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