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Data for today’s episode is provided by Mercator Advisory Group’s Report: Third-Party Delivery Firms Form Necessary but Uneasy Alliances with Merchants
The Rise of the U.S. Grocery and Restaurant Delivery Market:
- Before the pandemic, delivery firms were building their ordering platforms, partnering with grocers and restaurants, and developing a driver network.
- When COVID-19 hit, grocery stores were inundated and many restaurants were restricted to takeout orders only.
- Instacart had 100,000 drivers in 2019, but hired 500,000 more in 2020 upon the onset of the pandemic.
- Grocery and restaurant delivery is anticipated to encompass 11% of U.S. retail e-commerce sales by 2022.
- The U.S. grocery and restaurant delivery dollar volume is anticipated to rise to $99 billion by 2022, up from $55 billion in 2019.
- Grocery delivery fees run about 10% of the order price, while meal delivery fees can take up to 30% of the food check.
Home delivery of groceries and restaurant food is now a way of life for most U.S. households. During 2020, COVID-19 drove online ordering and doorstep delivery. Grocers in particular had more online volume than they could handle. For restaurants deprived of indoor dining, takeout and delivery became a lifeline. Third-party delivery companies provided the scale and capacity needed to manage the spike in delivery orders. Entering 2021, online ordering and fulfillment will remain a key sector of the retail e-commerce channel.