Delivery services in multiple sectors are getting a boost during the COVID-19 recession
The effects of COVID-19 have been devastating and will continue indefinitely. It is no longer a question of whether the The coronavirus pandemic will cause a global economic downturn. The question now is how much the economy will shrink.
The numbers are depressing
The Dow Jones Industrial Average closed last Friday at 19,173 points, its lowest level since December 2, 2016. A few weeks ago, in mid-February, the Dow was still at its highest level and reached almost 30,000.
There does not seem to be any hope of a quick recovery. More states are joining California to stop non-essential business and urge / order residents to stay at home. Hotels, restaurants, airlines and retailers, for example, warned about the potential to lay off millions of workers unless they received hundreds of billions of dollars in emergency funds.
On Sunday an economic rescue plan could not be implemented in a 47-47 vote in the Senate. In response, Asian markets and US stock futures fell on Monday.
It is estimated that the US economy could experience its worst slowdown in the coming months:
- Oxford Economics predicts that the US economy will contract 12% annually in the second quarter of 2020.
- JPMorgan expects a 14% decline in the second quarter.
- Goldman Sachs has warned of a staggering 24% decline.
Restaurant delivery is getting a boost
While states may take different measures when ordering a “lockdown,” residents are generally expected to follow the social distancing order to avoid close contact with others. Although people are expected to work from home, with the exception of essential staff, in most cases:
- Residents can go to grocery stores, grocery stores, gas stations, and pharmacies.
- The restaurants are closed for dinner but can deliver groceries to your home.
- Residents can pick up take-away orders in restaurants.
- Postal services, including USPS and FedEx, will continue to operate.
Even before the lockdown began, the restaurant delivery business was doing well. Typically, restaurants work with one or more of the four dominant food suppliers, UberEats, Grubhub, Postmates, or DoorDash, to deliver groceries.
McDonald’s, for example, added DoorDash as a new grocery delivery partner last July. Previously, McDonald’s had an exclusive partnership with UberEats, which serves approximately 64% of McDonald’s US operations. Delivery accounts for about 2-3% of the chain’s business, making a total of about $ 3 billion.
When restaurants are not allowed to offer food service, they make extra efforts to promote their take-out or delivery service. For many restaurateurs, this is really the only way to keep them from closing.
Not every resident is now a good home cook. Or they just want to try a variety of restaurant dishes during a lockdown. The restaurant delivery business is getting a boost.
The delivery of groceries is also going better
Grocery stores are classified as an essential business and will remain open during the pandemic lockdown. When everyone shops in the grocery stores, they become a dangerous place for the vulnerable. To cope with the coronavirus outbreak, many grocery stores have already cut opening hours while adding senior opening hours.
Some high-end grocery stores have already offered restaurant service to buyers. People may find it easier than before to buy restaurant-grade food from grocery stores. To avoid human contact in public places like grocery stores or restaurants, some residents may choose to have their groceries delivered to their homes.
Grocery stores have made long-term efforts to encourage shoppers to place delivery orders. Amazon, for example, is trying to offer a fresh food delivery service at its Whole Foods Market. Amazon Prime Pantry, which offers non-perishable groceries and essential household items to Prime members, closed last week due to a sudden surge in online orders.
The future of drone delivery has a bright future
While there are still concerns about drone delivery, the benefit of drone or robot delivery is that human contact is minimized. Some people believe that drones or robots can be used to fight the coronavirus outbreak. In China, demand in agricultural drone markets increased during the coronavirus outbreak as more drones were required to ship.
The future of the delivery business
The coronavirus is likely to change the way people shop, travel, and work for years. People are likely to rely more on delivery services. That demand will help fuel the delivery business, even if everyone is having a hard time fighting the pandemic.
What do you think of the prospect of the delivery business? Are there other companies that will have a positive outlook?