With our lives being dominated by COVID-19, it’s only natural that we can be subjected to what’s called, ‘Coronavirus blinkers’. The sudden inability to process anything more about the virus, and instead, filing that information into the ‘not today’ basket - and we switch off.
Well, we felt it was about time we discuss something COVID-19 related that’s positive. Something that doesn’t need to be filed away in your ‘not today’ pile. Something that’s appealing to learn; and what makes us all happy? FOOD!
If isolation has taught us anything, it’s that food delivery is good for the soul – and anything in delivery form while stuck in the house makes for an exciting tracked experience. Where is your pizza? 5mins and counting. Where is your Chinese? In the kitchen being prepared. Who is delivering my Indian tonight? *Insert name here*. Takeaway is a British staple, and having the comfort of good food through lockdown has been the light at the end of a very dark tunnel.
So, who are the key players in the UK market? What kind of market share are we talking? And what are some common behaviours in consumers? We let the data do the talking, and it did a lot more than just make our mouth water!
Advertising is not dead when it comes to attracting consumers into ordering takeaway! It won’t come as a surprise that the key players in the UK food delivery market are the brands we see on TV and hear on the radio every day. We see a Domino’s Pizza advert before every episode within the Channel 4 app, and that's sparking hunger in all of us!
JustEat – with Snoop Dogg as their latest marketing campaign – take the lion’s share of the UK market, with Uber Eats in 2nd place and Deliveroo in 3rd for food delivery apps. Overall however, Domino’s Pizza sits above Uber Eats and Deliveroo in the food delivery table, with 40% of market share behind JustEat’s whopping 73%. (globalwebindex)
But that’s not to say Deliveroo doesn’t have incredible strength in the UK market – even with their recent struggles. Between 2013 and 2016 alone, ‘Deliveroo was the fastest-growing company in Europe… over this period revenue increased by over 100,000%, with a compound growth rate of 923%’ - as seen in this visualisation of funding raised between 2015 and 2019. They also boast 45,000 daily users in the UK (businessofapps).
To think JustEat then have 73% market share… I mean, we’re one hungry nation!
When understanding food delivery numbers and market share, we need to also understand the behaviours behind ordering food from an app: ‘These cues are more influential among those in the UK, where around 6 in 10 order takeout as an occasional treat, compared to 49% of U.S. takeout eaters.’ (globalwebindex) This visualisation shows the 2020 month on month change of seated restaurant diners globally, compared to 2019, as sourced from Open Table.
No surprises then that ‘Worldwide, the market for food delivery stands at €111 billion, or 1 percent of the total food market and 4 percent of food sold through restaurants and fast-food chains.' And this is long before Coronavirus showed up! ‘“Convenience” is the holy grail across various sectors, and customers are willing to pay more for it.’ (McKinsey) As shown in this global food delivery revenue visualisation, including estimates on growth to 2022.
Other customer behaviours analysed by McKinsey in their report entitled, ‘The changing market for food delivery’ include: Platforms are sticky: New-delivery platforms, which personalize the ordering experience by storing relevant customer data, are sticky. Once customers sign up, 80% never or rarely leave for another platform, creating a strong winner-take-all dynamic, in which the reward goes to the player who can sign up the most customers in the shortest amount of time.' As seen with these American food delivery apps visualised.
'Time is critical: Speed of delivery is the biggest variable in customer satisfaction, with an average 60% of consumers across markets citing it as a key factor.
Meals are for home: Most orders—82%—were placed from home, while only 16% were placed from the workplace.
And finally, Orders spike on weekends: The highest-volume days for the online platforms were Friday, Saturday, and Sunday, when 74% of orders were placed.' (McKinsey)
COVID-19 & Deliveries
In the context of COVID-19 it’s hard to imagine anyone ‘winning’. But with the majority of the world practising social distancing and with many of us in the UK still in lockdown, delivery services like Amazon and streaming services like Netflix, have seen some strong financial benefits; and so too have food delivery and takeaway services.
“Food delivery and digital subscription services are benefiting the most from the outbreak according to a survey by payment provider Barclaycard, which recorded growth of 12.4% among subscription entertainment services such as Netflix and Now TV of 12.4%, while takeaways took off with sales growth of 8.7%.” (thedrum)
However, as with most commercial outputs, where there are peaks there are also troughs; And while Deliveroo is a key player in the food delivery market, even they have been hit hard by Coronavirus.
“The coronavirus pandemic of 2020 put additional strain on the company. While we might have expected it to thrive in the circumstances, it seems a considerable proportion of Deliveroo revenue came from big chains. With these shutting their doors, Deliveroo revenue was consequently hit. This also gives lie to Deliveroo’s claims that its model centres on independent, local businesses.” (businessofapps)
Let’s hope that as lockdown restrictions ease across the UK, and the number of infections continue to fall, our economy can get back on track – and with 1 in 4 takeout eaters believing they’ll ‘order takeout food more over the next 6 months’ (globalwebindex) there is definitely a market for businesses like Deliveroo to get back to their former glory.
But this data tells a strong narrative about the British market. We love takeaway, and it’s a big part of our lifestyle. And when it supports local businesses, and allows us to stay home and protect our NHS, it seems win win to us!