By Robert Miller | Portfolio Manager at NAOS Asset Management
We have likely all seen extensive marketing & advertising campaigns undertaken by the likes of UberEats, Menulog, Deliveroo and DoorDash. Brand awareness is high and the consumer take-up of food delivery services has seen significant growth, obviously amplified by COVID. User numbers are booming and this is likely a trend here to stay.
Given this high demand environment, you would think these companies are turning a profit…but are they? The hosts of The Journal podcast discuss this very fundamental question.
Industry margins are thin, so what does that say about the general business model of food delivery? Will these companies see outsized returns in time with further scale? It is interesting to see that the major players in the food delivery sector are pivoting their business models to try and achieve profitability, or achieve profitability sooner. There are different approaches being adopted, so time will tell whether these new & improved business models are viable over the long term.
This short podcast episode might get you thinking differently next time you see one of the many UberEats ads on TV…
Link to podcast
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