Shoppers are cutting back spending on everything from snacks to washing machines.
But when they do buy something, they're still willing to have it shipped right to their doorstep, earnings from the major delivery companies suggest.
During Uber's second quarter, "the number of first-time consumers on Uber Eats in the US was higher than at any point over the past 5 quarters," CEO Dara Khosrowshahi said during a call on Tuesday.
Later in the day, Instacart reported a 10% jump in the value of transactions on its platform during the second quarter. Most of that increase came as customers placed more orders, CEO Fidji Simo said on a call with analysts.
And Instacart's average order value during the quarter was $116 — the highest in about three years, Robert Mollins, a Gordon Haskett analyst, wrote in a research note on Wednesday.
The two reports follow similar results from DoorDash last week. Total orders rose 19% during the company's second quarter, it said on August 1.
Shoppers are also still dealing with historically high prices, especially for food, even though inflation has slowed over the last few months.
And delivery, especially through third-party services, often costs customers extra compared to picking something up at a store. One Instacart customer posted on TikTok after finding out that she paid nearly $100 more in markups ordering groceries through the service than she would have if she had gone to the supermarket herself, for instance.
Before the latest round of earnings, "investors were concerned about softening consumer spending at restaurants," Mollins wrote in a note last week. That could impact delivery companies. Those fears were eased once DoorDash reported another strong quarter of order growth, he added.
"We're not actually seeing some of the challenges that you may be hearing about or reading about in other headlines," DoorDash CEO Tony Xu said during an investor call.
To be sure, part of Doordash's growth has been due to expansion beyond its traditional restaurant delivery realm. This year, for example, the company started delivering orders for Lowe's and added to its partnership with beauty retailer Ulta.
"Increasingly, we're seeing customers coming to us for the first time actually for non-restaurant use cases," Xu said.
Customers who have their purchases delivered aren't a perfect proxy for the broader economy, too. Uber's Khosrowshahi said that his company is "not seeing any softness or trading down across any income cohort." However, he acknowledged that the company's consumers "tend to be higher income" than the general population.
Still, the delivery companies are offering deals for customers who want to get the best bang for their buck.
"The cost of groceries continues to be top of mind for consumers," Instacart's Simo wrote in a letter announcing the quarterly results.
She pointed to several Instacart efforts to keep prices low for customers, such as creating digital versions of circulars traditionally found in newspapers as well as offering free delivery windows meant to attract new customers.
Correction: August 9, 2024 — An earlier version of this story misstated Instacart's average order value in the second quarter. It was $116, not $106.
Do you work for DoorDash, Instacart, Uber Eats, or another gig delivery service and have a story to share? Reach out to this reporter at abitter@bjinnox.com
