Food delivery apps brace for cost-of-living crunch

STORY: Food delivery companies boomed during the health crisis.

Now, though, that popularity has waned.

In the U.S., restaurant delivery orders fell 6.3% for the 12 months ending in June to 4.8 billion.

It was the first year-over-year drop the sector had seen in six years.

It comes as customers face surging prices and start to cut back.

Companies have therefore taken action to revamp their business, such as reducing costs and leaving unprofitable markets.

Some, like Grubhub, have made tactical moves.

The U.S. firm struck a deal with Amazon this month allowing Prime customers a year’s free delivery.

The deal was a boost for Grubhub owner Just Eat Takeaway.

It bought the app for $7.3 billion last year, but has now said it is up for sale.

Elsewhere, Just East Takeaway hiked restaurant commissions across Europe.

Uber Eats quit Brazil, while Britain’s Deliveroo left Spain.

Analysts say such exits are likely to leave each territory with a dominant player that is well placed to expand.

In the U.S., that looks like DoorDash.

In Northern Europe Just Eat would have the lead, while Glovo rules in Southern Europe and iFood in Brazil.

The food delivery sector is currently loss-making.

Analysts still believe it will eventually become a money maker due to customers’ love of convenience.

But now, with the cost-of-living crunch hitting home, companies will need to adapt to lower demand...and quickly.

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