While the use of food delivery services like Grubhub and DoorDash have seen record highs due to COVID-19 restrictions, most – if not all – food delivery services are still failing to turn a profit.
According to data from The NPD Group compiled by the Wall Street Journal, food delivery services are sharing just 9 percent of the total off-premises restaurant sales in the U.S. for 2020. Those numbers are nearly exactly the same for 2018 and 2019, where food delivery companies have also struggled to increase margins.
Sales for these companies are soaring, but new costs for safety equipment along with pressure to reduce commissions continues to offset any profits Uber, Grubhub or others can make off this unprecedented food delivery market.
At the same time, restaurants are growing impatient at what they consider excessively high fees for delivery food, with more and more local businesses asking customers to order directly from them as opposed to going through delivery service apps.
According to the Wall Street Journal, more people are opting for grocery delivery and pickup as opposed to food and restaurant delivery during COVID-19 lockdowns. Ultimately, this incredible food delivery market surge has brought a swell of competition, and companies are spending record amounts of cash for advertising to stay relevant and in customers’ minds.
