The third-party delivery market

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Third-party delivery represents some of the largest checks. But, finds Technomic, “most operators approach the service as a means to grow their consumer base rather than overall check average.” The researcher has found that both restaurants and third-party companies believe customers who place orders through these third-party providers are more loyal to the provider, not the restaurant. As a result, restaurants, on average, are partnering with two delivery services.

But the third-party delivery market is projected to consolidate, especially as the larger providers continue to purchase small third-party companies as a way to expand regionally. “As the market narrows to only large providers, pricing and other brand differentiators are likely to play a larger role in the selection process,” says Technomic. So how are those brands performing as the market continues to shift?

Third-party delivery share of sales

Grubhub remains the dominant player in the space, accounting for 52% of the overall market share, finds Technomic.  Drilling down regionally, though, the story looks a little different.

Average consumer monthly transactions

The continuing purchase of these small players has, in part, allowed delivery to expand beyond major metro areas into secondary cities and suburban markets. But as they continue to grow, how are these large players performing? As of August 2018, consumers averaged 2.6 transactions per month with third-party delivery providers. That number is slightly higher for some of the larger companies.


Spend power

Uber Eats has an above-average number of transactions, but its average check is the lowest of the large brands, starting 2018 at $28.72 and hitting $22.44 in August. Caviar has had an average check above $40 all year, and Postmates has hovered in the mid- to high $20s.


Long-term retention

All five of these large third-party delivery providers retained a third or more of their customers for one year. For example, 48% of customers who ordered from Grubhub in September of 2017 placed subsequent orders through September of this year. Uber Eats retained nearly two in five of its customers who ordered in September of last year.


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