DoorDash Sees Digital Orders Surge Despite Industry Headwinds

As consumers look to cut costs amid ongoing financial pressures, DoorDash is seeing that digital ordering is largely protected from the traffic declines experienced across other channels in the restaurant industry.

The San Francisco-based restaurant aggregator shared Thursday (Aug. 1) in its second-quarter 2024 earnings report that total orders rose 19% year over year and revenue was up 23%.

“We’re seeing really strong demand on the consumer side,” CEO Tony Xu told analysts on a conference call. “So, we’re not actually seeing some of the challenges that you may be hearing about or reading about in other headlines… We’re still in the early innings of the move towards digital and the overall omnichannel experiences that every restaurant and retailer is participating in… While some restaurants … may be seeing some headwinds in traffic, their digital channels are growing very robustly — many multiples of their overall growth.”

Many consumers are growing frustrated with rising restaurant prices, cutting back on restaurant trips in favor of more affordable options such as buying groceries to cook at home.

Still, many diners continue to use restaurant aggregators, per the latest edition of PYMNTS Intelligence’s “How the World Does Digital” study. The report, based on surveys of more than 67,000 consumers across 11 countries accounting for roughly half the world’s gross domestic product (GDP), revealed that 44% of consumers order from aggregators at least once a month. The average consumer uses an aggregator about six days each month.

Additionally, the study revealed that younger consumers are likelier to use restaurant aggregators than their older counterparts. Approximately 4 in 10 Generation Zers do so weekly compared to less than 9% of baby boomers.

Plus, Xu pointed out that not only are aggregator sales on the rise, but restaurants’ direct digital ordering channels are also benefitting.

“If you look at digital, … that’s growing not just for us at DoorDash on our marketplace, it’s also growing for us in our first-party platform, as we power a lot of these restaurant and retailer websites for ordering, as well as their delivery channels,” Xu said during the call.

The same PYMNTS Intelligence study revealed that 47% of consumers order from restaurants’ websites or apps monthly. Thirty-nine percent of Gen Zers do so weekly, versus 10% of baby boomers.

The demand for greater affordability is driving subscriptions for DoorDash, as many consumers, particularly lower-income shoppers, feel concerned about their economic prospects.

“We continue to work on our affordability programs,” Xu said during the call. “DashPass had an all-time high in terms of its subscriber base.”

In an environment where consumers are increasingly vigilant about their spending, DoorDash’s growth underscores the resilience of digital ordering channels. Despite widespread declines in restaurant foot traffic, the company’s year-over-year gains in orders and revenue suggest a shift in consumer behavior toward online convenience and affordability. Xu’s confidence in the ongoing digital shift of the restaurant industry, bolstered by demand for both aggregator and direct eCommerce channels, highlights the extent of the industry’s transformation.