DoorDash tripled sales thanks to lockdowns – but still slid to a loss

Australian households in lockdown and facing shut restaurants in 2021 turned to meal delivery platforms in their droves.

Australian sales for online food delivery service DoorDash tripled last year amid a surge in use through the Covid-19 pandemic, new accounts show.

It was much the same for others, such as UberEats, Deliveroo and Menulog, as the $850m on-demand food delivery platform sector boomed while restaurants were kept closed as part of health restrictions.

However, DoorDash struggled to turn the surge in revenue into profit – as payments to suppliers and bloated advertising expenses pushed it into a loss for the year.

DoorDash Australia posted revenue for the 12 months to December 2021 of $159.5m, up threefold from $53.2m in 2020.

But it swung to a loss of $2.1m for the year – from a profit of $2.9m in 2020 – as the cost of sales more than trebled to $37.4m. Selling and marketing costs rose from $29.6m to $87.6m. “A review of the operations of the company during the financial year and the results of those operations show the company continuing to invest heavily and gaining momentum in expanding its presence in the Australian market,” the DoorDash directors report said.

DoorDash was launched in Australia in 2019.

The global company is now worth more $US23bn ($33.35bn). In Australia, DoorDash offers meals from a range of restaurants and cafes as well as fast-food chains such as McDonald’s, Hungry Jacks, Grill’d and Guzman y Gomez.

DoorDash chief executive and co-founder Tony Xu. Picture: David Geraghty

Just Eat Takeaway, the global food-delivery giant created in 2020 from the £6bn ($10.2bn) merger of London-listed Just Eat and Dutch group Takeaway.com, recently called out Australia in its full-year results presentation to investors as one of its fastest-growing countries.

The group owns the popular Menulog service in Australia.

“In 2021, Australia was one of Just Eat Takeaway.com’s fastest growing markets in terms of order numbers, demonstrating a significant turnaround in performance following online share declines before the combination between Takeaway.com and Just Eat,” the company’s financial report said.

“In 2021, Southern Europe and Australia/New Zealand orders, and gross transaction value grew 38 per cent year on year, while revenue growth outperformed both GTV and orders and reached 48 per cent growth year on year.

“This was the result of a continued mix shift towards delivery orders, particularly in Australia, as well as an increase in delivery fees in the second half.”

Research house IBISWorld said the online food-ordering and delivery sector in Australia generates annual revenue of $850.5m, growing 20.6 per cent between 2017 and 20022, with growth accelerated by Covid-19.

“The start of the Covid-19 pandemic in early 2020 presented industry operators with a key opportunity for revenue expansion,” an IBISWorld report said.

“As Covid-19 spread in Australia, restaurants across the country were forced to close to dine-in customers, due to social distancing restrictions and other public health responses....

“While restaurants were forced to close to dine-in customers, they remained open to delivery services.

“This has significantly increased restaurant partner adoption across industry platforms, as restaurants sought to recover the loss of in-person turnover.”

But the report also warns reduced growth in discretionary income, as well as the easing of restrictions in NSW and Victoria, was likely to reduce the growth in demand for industry services in the current year.

Originally published as DoorDash tripled sales thanks to lockdowns – but still slid to a loss