Shares of food delivery service DoorDash (DASH) popped by nearly 10% last Thursday after the company shared some encouraging news in its quarterly earnings report on Wednesday. The company broke its own records for total orders, gross order value, and number of active users.
Despite a wave of restaurant openings and lessening Covid-19 restrictions, DoorDash’s total sales for 2021 exceeded those of 2020. CEO Tony Xu thinks DoorDash has “put to rest this question of what happens to demand when diners go back to eating in restaurants.”
Speaking of food delivery service success, Grubhub (GRUB) announced last week the launch of its new “Grubhub Goods” service in collaboration with 7-Eleven. The service allows for on-demand delivery of convenience goods from more the 3,000 7-Elevens across the US.
Why it matters
Food delivery services like DoorDash and Grubhub are defying the predictions of analysts that their popularity would fade in a post stay-at-home world. On the other hand, brick-and-mortar restaurants continue to struggle in the face of inflation and supply chain issues. For example, shares of burger chain Shake Shack (SHAK) fell by more than 4% on Friday after it announced in its earnings call that rising food and labor costs hurt its bottom line.
