Continued Growth in Delivery Sectors

A recent survey by Oppenheimer involving 1,451 respondents indicates positive trends for the restaurant and grocery delivery sectors, highlighting growth in user spending and untapped opportunities.

Key Findings

• Increase in Spending: 64% of restaurant delivery users and 70% of grocery delivery users report spending more than six months ago. This is largely due to product improvements such as faster delivery times and fewer errors.
• Confidence Boost: This trend has resulted in a 2% increase in gross transaction volume (GTV) and gross order value (GOV) estimates for Uber Delivery and DoorDash for the years 2025 and 2026.
• Opportunity in Restaurant Delivery: Despite strong spending, 40% of restaurant delivery users are infrequent customers, suggesting there are opportunities to boost order frequency.
• Drivers of Increased Spending: 60% of users indicated that faster deliveries and fewer mistakes are key to their increased spending. Additionally, 23% of the respondents appreciate the convenience of app usage and avoiding cooking.
• Cost Concerns for Non-Users: 33% of non-users cited cost as a reason for not using restaurant delivery apps, and 71% were unaware of cost-saving benefits from subscriptions like Uber One or DashPass, indicating a marketing opportunity.
• Grocery Delivery Retention: Grocery delivery has lower market penetration compared to restaurant delivery (57% vs. 67%). However, it exhibits strong retention, with only 7% of users reporting decreased spending recently.
• Successful Partnerships: The collaboration between Uber Technologies Inc and Instacart has shown promising results, with 82% of online grocery users also using Instacart for restaurant orders. Oppenheimer believes this partnership is valuable for Uber.
• Stock Price Targets Raised: Due to these positive trends, Oppenheimer has raised the stock price targets for Uber from $90 to $95 and DoorDash from $145 to $160.

Conclusion

There remains significant growth potential in both the restaurant and grocery delivery sectors, underpinned by product improvements and effective partnerships.