Mobile delivery platform DoorDash said Wednesday the company "executed well" in its first fiscal quarter of 2024 as demand for grocery delivery and in the delivery retail sector as a whole continues to climb. The company improved on its net loss compared to the same time a year ago as total orders increased by 21% year-over-year, the company said in an earnings report.
The company said its revenue rose by 23% up to $2.51 billion for the January-March period.
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The news comes as the grocery delivery market in the U.S. was anticipated to reach a revenue of $257.5 billion this year, Statista reported. The U.S. grocery retail sector saw steady increases in growth last year and was expected to grow year-over-year by 4.2% to $1.56 trillion by this year, Supermarket News reported based off data compiled by Coresight Research.
Companies like DoorDash have found success by partnering with other retailers. Members of the popular Amazon Prime delivery subscription are offered 12 months of DashPass for free. The premium level for DoorDash's service usually costs members $9.99 per month.
Customers ordering grocery items to be delivered on DoorDash with DashPass are drawn in by reduced or sometimes eliminated fees, and are able to use SNAP and EBT benefits on grocery items, along with same-day delivery. Competitor services like Walmart+ for grocery delivery often request customers to pick a time on the following day for grocery deliveries, or pay a fee for same day deliveries.
Increases in the price of owning a car could also contribute to higher demand for delivery of items from brick and mortar stores. A March report fromForbes highlighted consumer shock in states across the country as car owners reported receiving car insurance renewal notices with ever higher rates. An assessment by Forbes Advisor found that car insurance rates across the U.S. were averaging around $2,118 annually.
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On Wednesday the Federal Reserve said it would keep the federal funds rate at 5.25% to 5.5% even as inflation in the United States remains elevated and the country's economic outlook appears "uncertain." The central bank said economic activity in the United States has appeared to expand continuously at a "solid pace."
An April report from The Associated Press pointed to a phenomenon known as the "wealth effect" in the U.S. as a possible reason for some of the spikes in discretionary spending, pointing to how rising home and stock prices have made some more confident in their spending. That report pointed to older Americans and affluent Americans taking a significant part of the responsibility for consumer spending in the U.S. — a key factor in economic growth.
Areport from the National Institutes of Health found that in adjusted analysis, women were more likely, at 40%, to have shopped online for groceries than men, at 34%. The study found that people 39 years old and younger more likely, at 47%, to have shopped for groceries online than those 40-54 years old, at 41%. And those percentages were at 36% for people 55-64 and 31% for those 65 years and older.
