DoorDash and Uber Eats are moving beyond food, focusing on groceries and alcohol, as users cut spending due to high inflation and a potential economic downturn
Delivery apps look to move beyond food as they face high inflation, a potential economic downturn — Grubhub CEO on the Postpandemic Future of Food Delivery Tweets: @preetika_rana , @jerrycap , @ericbellmanwsj , and @berber_jin1 Tweets: Preetika Rana / @preetika_rana : Did your food-delivery bill kill your appetite? In my latest: Apps sweetening the deal for restaurants & consumers amid slowing growth & high inflation. That in-app push to combine your tacos with toothpaste & toilet paper is to tempt you to spend more https://www.wsj.com/... @jerrycap : Uber found another problem https://twitter.com/... Eric Bellman / @ericbellmanwsj : With inflation and growth worries will people keep ordering delivery? We are about to find out. After surging growth during the pandemic, Uber Eats and DoorDash are facing their slowest growth in years https://www.wsj.com/... via @WSJ Berber Jin / @berber_jin1 : “I definitely have been cutting back on delivery and other excess spending...My girlfriend has said multiple times, 'Why are we ordering DoorDash? Let's just go pick it up.'” absolutely damning https://www.wsj.com/...
Context & Ripple Effects
Restaurant delivery had already become more entrenched after the pandemic pushed operators toward platforms such as DoorDash and Grubhub in a restaurant-industry pivot to delivery. The new emphasis on groceries and alcohol seeks to broaden what those platforms can sell as food-order growth slows.
The move also arrives as standalone rapid-grocery services are retrenching: many had pulled back or shut down over uneconomic delivery models, despite substantial capital flowing into the New York market earlier in 2022.
First-order effects
- DoorDash and Uber Eats shift their consumer proposition from restaurant meals toward larger, mixed baskets that include groceries and alcohol, targeting spending that would otherwise occur outside food delivery.
- Grubhub faces a more direct contest for customer frequency as DoorDash and Uber Eats use their existing food-delivery audience to promote additional categories.
Second-order effects
- The retreat of rapid-delivery startups leaves DoorDash and Uber Eats a clearer opening to compete for grocery demand, while making delivery economics a central test of their expansion.
- Restaurants become less singularly important to platform order volume as grocery and alcohol merchants gain a larger role in the marketplaces.
Third-order effects
- If mixed-basket ordering becomes durable, food-delivery platforms will evolve into broader local-commerce marketplaces, with repeat usage and basket composition mattering more than restaurant selection alone.
- The rapid-delivery shakeout suggests that category expansion will favor platforms able to spread delivery operations across multiple merchant types rather than standalone grocery specialists.
The trend: Food-delivery platforms are pursuing multi-category local commerce to sustain order frequency as the post-pandemic restaurant-delivery market matures.