DoorDash delivered 467 million orders in the fourth quarter, a new record for the company.
The obvious takeaway: Consumer demand for delivery isn’t going anywhere.
But where exactly is it going? Maybe not to restaurants. Though the industry still accounts for the biggest chunk of DoorDash’s business, other categories are growing faster.
DoorDash’s grocery delivery channel, for instance, grew 100% during 2022. Convenience-store delivery grew 60%. Both are expanding “meaningfully faster” than restaurants for DoorDash, CFO Prabir Adarkar said during an earnings call Thursday.
They’re also attracting new users who like the greater selection. “A growing number of new customers start their journey with DoorDash with the non-restaurant categories,” Adarkar said, according to a transcript on financial services site Sentieo.
To be clear, the vast majority of DoorDash users are still using the app to order prepared food. But the share who are trying other channels is growing. In 2021, 14% of DoorDash’s monthly active users had ordered from a non-restaurant category. Last year, that number was 17%.
And DoorDash is clearly investing in those other categories. Earlier this year, it launched a package pickup service. Then it ran a Super Bowl ad that was all about grocery delivery.
The same could be said for competitor Uber Eats, which reported delivery gross bookings growth of 6% year over year in the fourth quarter (or 14% on a constant currency basis).
But the company didn’t mention restaurants during an earnings call or in a press release. Instead, it called out new grocery partnerships with Food Bazaar, Grocery Outlet and Meijer. Last year it ran a whole campaign—Eats and Don’t Eats—to remind people that it delivers things other than food. (The ads gave us this memorable visual of Cousin Greg from “Succession” taking a bite out of a sponge.)
All of that translates into growth for DoorDash and Uber Eats, but not necessarily for restaurants.
That becomes clear when looking at restaurants’ own delivery sales, which at the very least don’t seem to be growing, and in some cases are moving in the other direction.
At Chipotle Mexican Grill, for instance, delivery orders fell by 15% in the fourth quarter. CEO Brian Niccol suggested inflation-weary guests are switching to pickup.
McDonald’s has also seen consumers returning to pre-pandemic ordering methods. “While delivery is still elevated, it's come back a little bit as customers revert to more typical ordering channels,” CFO Ian Borden told analysts last month, according to Sentieo.
The discrepancy means that we should be careful not to equate the performance of delivery companies with restaurant delivery. Or risk ending up with a mouthful of sponge.