DoorDash is breaking order volume records, as its rapidly expanding grocery business creates more sales.
The food delivery giant, which operates in more than 25 countries, shared in its second-quarter 2023 earnings report Wednesday (Aug. 2) that total orders rose 25% year over year to a record 532 million in the quarter, while the marketplace’s gross order value (GOV) grew 33% to a highest-yet $2.1 billion.
Contributing to this growth is the expansion of the aggregator’s non-restaurant verticals, especially grocery.
“Over the last two and a half years, we’ve built a multibillion-dollar grocery business from scratch, and it was really ready for primetime exposure,” DoorDash CEO Tony Xu told analysts on a call. “… We now have more non-restaurant stores on the platform in North America [than] any other platform. We’re growing faster than every other platform and gaining share dramatically in virtually all categories, and very specifically also in grocery.”
PYMNTS research revealed that online orders make up a small portion of all grocery purchases, but that share is positioned for growth in the next year.
Data from “Tracking the Digital Payments Takeover: Catching the Coming eCommerce Wave,” created in collaboration with Amazon Web Services (AWS), showed that 12% of grocery transactions occur online. However, 32% of shoppers surveyed said they are very or extremely likely to increase their online grocery purchases in the next year.
For DoorDash’s part, the company is still also driving growth in its core restaurant delivery business. The aggregator stated in its earnings release that, “based on third-party data,” it “believe[s]” that it has gained share in restaurants, convenience and grocery in the United States. Still, there is a long way to go.
“Even though [our restaurant] business has achieved a great deal, it’s still single-digit percentage representation of the U.S. restaurant industry in terms of total sales, so … I think there’s still a lot to solve in our core business,” Xu said during the call.
PYMNTS research confirmed that aggregators make up only a small share of restaurant orders. Our survey of nearly 2,000 U.S. consumers in June for the Connected Dining series revealed that less than 5% of respondents had placed their last restaurant order online through a food aggregator, and only about 4 in 10 reported having used an aggregator in the past six months.
Among these aggregator users, however, DoorDash reigns supreme, with 77% of consumers in this group reporting having used the San Francisco-based food delivery service in the same period, above the 49% that said the same of Uber Eats and the 35% that used Grubhub. DoorDash is gaining share, with that figure up from the low-seventies percentage range a year earlier.
In the quarter, DoorDash announced an hourly pay option for its gig worker drivers, shared that it is adding the ability to pay for groceries via Supplemental Nutrition Assistance Program (SNAP) Electronic Benefits Transfer (EBT) and debuted a partnership with Amazon Canada to offer free yearlong DashPass subscriptions to Prime members in the country, among other new initiatives and features.