Online meal firms hit by coronavirus crisis

The lockdown of millions of people at home across the globe due to the coronavirus should have been the perfect recipe for success for the burgeoning online meal delivery market. But some of the world’s largest players, including Uber Eats and Just Eat, which is being bought by Takeaway.com, have been hit by a double whammy: restaurant suppliers have been ordered to shut and with more time at home to cook for themselves, some people appear to have lost their appetite for takeaway.

While many restaurants have switched to offering takeaway, giving the online services a bump in members signing up, some of the world’s biggest food chains using the apps, such as Mcdonald’s and Wagamama, have closed for the time being.

Data from Similarweb, which tracks downloads and use of smartphone apps and websites across key European markets, highlights the scale of the slowdown across Europe as the pandemic spread and governments ordered people to stay at home.

In France, Spain and the United Kingdom, Just Eat and Uber Eats saw drops in average daily users ranging from 2 per cent to as much as 23 per cent in March, compared with the averages for January and February. Deliveroo also saw falls in France and Spain, although a small increase in the United Kingdom, the data shows.

The falls reflect a big drop in repeat customers. Some 90% of activity on apps is reorders, according to Similarweb.

The data is in stark contrast to the double-digit percentage increases in grocery delivery volumes over the same period as people rushed to stock up as they went into lockdown.

The numbers offer a glimpse into how the virus has quickly changed people’s food ordering and cooking habits and has put the brakes on a fast-growing industry.

Before the virus, the European industry, worth about $16.5 billion in revenue, was expected to grow by 10 per cent per year over the next decade, according to Statistica.

Just Eat and Deliveroo declined to comment on the data. An Uber spokesman said the impact of the virus had varied widely across Europe, but it had seen big increases in restaurants and shops signing up to its app.

In other parts of the world, the picture is less clear. Takeaway.com has seen early signs in Asia of a pick-up in demand after a slowdown in the early stages of lockdowns there. Giving the first insight into the impact in China, the original epicentre of the outbreak with the first lockdowns, Chinese food delivery service Meituan Dianping said last week it expected to report a first-quarter loss after a drop in orders.

In the United States, Grubhub said demand for takeout appeared to be recovering in some parts of the country, but it was a different picture in places including New York, where a bustling restaurant scene has battened down the hatches as restrictions kick in.

Uber Eats, Grubhub, Delivery Hero and Just Eat Takeaway - whose merger is awaiting UK regulatory approval - have offered incentives to restaurants, including cutting commission or delivery fees and signing up new members more quickly, to improve their cashflow and help them through the crisis.

That should provide a boost to their own membership numbers in the long run once orders improve. Grubhub signed up more than 20,000 new restaurants in March, far exceeding its previous monthly record of 5,000, said Maloney. Deliveroo got 3,000 new UK restaurants on board last month, a spokesperson said.

The loss of business has prompted some to branch into new markets. Delivery Hero is expanding into supplying groceries to customers stuck at home and Uber Eats has broadened its grocery offering by teaming up with supermarkets like Carrefour.

Uber Eat’s grocery and convenience store sales have more than doubled in some European cities, the Uber spokesman said. Delivery Hero is offering its grocery service for free and is trying to make it pay by selling high-margin consumer products, CEO Niklas Ostberg said.

Restaurant suppliers have been ordered to shut and with more time at home to cook for themselves, some people appear to have lost their appetite for takeaway