United States Online Food Delivery Market

United States Online Food Delivery Market Overview:

The United States online food delivery market size reached US$ 29.1 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 68.6 Billion by 2032, exhibiting a growth rate (CAGR) of 9.8% during 2024-2032. The growing preference for convenient and fast service among consumers, rising reliance on smartphones and high internet penetration, and increasing adoption of advanced technologies to enhance user service are some of the factors impelling the market growth.

United States Online Food Delivery Market Analysis:

• Major Market Drivers: The market is experiencing a strong growth owing to the high penetration of the internet and smartphone usage, coupled with the growing preference for convenient and fast services among consumers.
• Key Market Trends: The expansion of delivery choices, such as contactless and drone deliveries, in order to improve customer satisfaction. Besides this, restaurants and delivery platforms are using machine learning (ML) and artificial intelligence (AI) to improve delivery routes and increase operational efficiencies.
• Competitive Landscape: Major competitors are vying for market dominance by focusing on delivery speed, expenses, and collaborations with eateries, all while putting more resources into advertising and technology.
• Challenges and Opportunities: High operational costs, maintaining profit margins amidst fierce competition, and dealing with regulatory hurdles are influencing the United States online food delivery market revenue. Nevertheless, there are possibilities in venturing into underserved markets, improving user experience with technology, and taking advantage of the growing desire for healthy and gourmet food choices.

United States Online Food Delivery Market Trends:

Technological Advancements

The rise in sales of smartphones and fast internet connections are simplifying the process for individuals to purchase meals from their preferred eateries by simply tapping a few times. The ordering process is becoming easier for people due to mobile applications and user-friendly interfaces, offering a smooth experience. Additionally, the industry is being transformed by the incorporation of AI and ML, which streamlines delivery routes, forecasts demand, and tailors suggestions to user preferences. Novel ways of delivering products like contactless deliveries and the possible use of drones, are improving efficiency and safety. For instance, in August 2021, Grubhub and Yandex SDG introduced robotic food delivery at the Ohio State University, enhancing campus dining with 50 autonomous rovers delivering food orders seamlessly to the doorsteps of the students. This innovative collaboration offers a convenient and efficient dining experience, revolutionizing campus food delivery with cutting-edge technology.

Strategic Partnerships and Acquisitions

The increasing focus on forming strategic partnerships and making acquisitions plays a crucial role in propelling the United States online food delivery market growth. Top companies are seeking to increase their market share and improve their service offerings by forming partnerships with restaurant chains, grocery stores, and other food service providers. These collaborations enable food delivery applications to expand their range of food choices, serving a larger audience. In June 2023, Grubhub and Homewood Suites by Hilton partnered to offer dining options to guests at approximately 500 sites across the United States. Through the use of geolocation and quick response (QR) codes within the Grubhub app, tourists could easily order from local restaurants, enhancing their experience with a variety of dining choices. Furthermore, the buying of smaller delivery services and technology companies allows leading businesses to strengthen their position, improve efficiency, and smoothly incorporate new technologies. Besides this, collaborations with big supermarket companies result in the introduction of grocery delivery services, adding value to customers and generating fresh sources of income. These tactical decisions enhance the competitive advantage of important participants and foster innovation and productivity, leading to overall market growth.

Marketing and Promotional Campaigns

Aggressive marketing and promotional campaigns are essential drivers of the online food delivery market. According to the and United States online food delivery market outlook, companies are investing heavily in advertising across various platforms, including social media, television (TV), and online channels, to increase brand awareness and attract new users. Promotional offers, such as discounts, free deliveries, and loyalty programs, play a crucial role in retaining existing users and encouraging frequent usage of the service. For example, in June 2023, Grubhub and Amazon renewed their free Grubhub+ promotion for another year for American Prime members, offering no delivery fees and special discounts on restaurant purchases. This partnership increased the worth of Prime by providing members with great discounts and special dining opportunities via Grubhub's platform.

Furthermore, collaborating with popular events or influencers during specific times of the year increases brand exposure and interaction with people. These marketing strategies are especially successful in transitioning traditional in-person diners to online delivery users. Through the use of inventive marketing tactics, delivery platforms can consistently connect with their audience, giving them a competitive advantage, increasing user acquisition, and fostering continuous market growth.

United States Online Food Delivery Market Segmentation:

IMARC Group provides an analysis of the key United States online food delivery market trends in each segment, along with forecasts at the country and regional levels from 2024-2032. Our report has categorized the market based on platform type, business model and payment method.

Breakup by Platform Type:

• Mobile Applications
• Websites
   

Mobile applications account for the majority of the market share

The report has provided a detailed breakup and analysis of the market based on the platform type. This includes mobile applications and websites. According to the report, mobile applications represented the largest segment.

Mobile applications hold the biggest share of the market due to their simplicity, availability, and improved user satisfaction. These applications have user-friendly interfaces, tailored suggestions, and smooth ordering systems, leading to a notable rise in their appeal to users. Many users prefer mobile apps due to the ability to order from anywhere at any time, along with features like real-time tracking, push notifications for deals, promotions, and secure payment options. Furthermore, incorporating loyalty programs and special discounts within apps also encourages their utilization. As smartphone penetration continues to rise and technological advancements improve app functionalities, the dominance of mobile applications in the market is expected to grow even stronger. As per the IMARC Group, the US smartphone market is projected to grow at a CAGR of 2.07% between 2024 and 2032.

Breakup by Business Model:

• Order Focused Food Delivery System
• Logistics Based Food Delivery System
• Full Service Food Delivery System
   

Order focused food delivery system holds the largest share of the industry

A detailed breakup and analysis of the market based on the business model have also been provided in the report. This includes order focused food delivery system, logistics based food delivery system, and full service food delivery system. According to the report, order focused food delivery system accounted for the largest market share.

Order focused food delivery system represents the biggest segment as per the industry overview due to its efficient and direct connection between users and restaurants. In this model, platforms concentrate on making the ordering process easier without handling the delivery logistics directly. This enables restaurants to manage deliveries themselves or utilize third-party delivery services. The model centered on orders receives advantages from reduced operational complexities and costs, allowing these platforms to quickly expand and provide individuals with a diverse selection of restaurant options. Focusing on order processing, user service, and payment handling allows these platforms to offer a smooth user experience, while also enabling restaurants to retain control over their delivery operations. The appeal of this model to provide flexibility and simplicity to consumers and restaurant partners, ensures that it remains dominant in the market.

Breakup by Payment Method:

• Online
• Cash on Delivery
   

Online represents the leading market segment

The United States online food delivery market research report has provided a detailed breakup and analysis of the industry based on the payment method. This includes online and cash on delivery. According to the report, online represented the largest segment.

Online payments are the most vital part of the online food delivery, driven by their convenience, speed, and security measures. The user experience is greatly improved due to the growing use of digital payment options like credit and debit cards, digital wallets, and mobile payment apps, which allow for fast and convenient transactions. In 2023, the US mobile payment market was valued at US$ 612.6 billion and is projected to reach US$ 3,901.8 Billion by 2032, according to the IMARC Group. Consumers opt for online payments due to the convenience of avoiding cash handling and the option to quickly place orders with just a few clicks, often being seamlessly integrated into mobile apps for smooth transactions. Moreover, online payments provide extra security measures with encryption and fraud detection technologies, improving consumer trust.

Breakup by Region:

• Northeast
• Midwest
• South
• West
   

South leads the market, accounting for the largest United States online food delivery market share

The report has also provided a comprehensive analysis of all the major markets in the United States, which include Northeast, Midwest, South, and West. According to the report, South was the largest market for online food delivery in the United States.

The South represents the largest segment in the market, driven by its expansive population, diverse urban centers, and rapidly growing suburban areas. Major cities serve as vital hubs for food delivery services, with a dense array of restaurants and a high demand for convenient dining options. Moreover, in December 2021, DoorDash extended grocery delivery through a partnership with Southeastern Grocers, benefiting customers in the Southeastern U.S., including Florida, Georgia, Alabama, Mississippi, and Louisiana, offering same-day delivery from over 400 stores in the region. This move aligned with consumer demand for convenience and speed in grocery delivery services, particularly in Southern states.

Furthermore, the region's demographic trends, including a younger, tech-savvy population, are driving the United States online food delivery market demand. Additionally, the South is experiencing a rise in economic growth and urbanization, contributing to an increase in disposable incomes and a preference for dining convenience. The prevalence of busy lifestyles and the popularity of Southern cuisine, which includes a wide range of food preferences from traditional to innovative, is supporting the growth of the market.

Competitive Landscape:

• The market research report has also provided a comprehensive analysis of the competitive landscape in the market.
• Major players in the market are actively implementing strategies to uphold and grow their market leadership. Top companies are prioritizing improving user experience with simplified ordering processes, quicker delivery times, and a larger variety of restaurant collaborations. For instance, in June 2023, DoorDash collaborated with major grocery stores such as ALDI, Albertsons, Safeway, Meijer, and 7-Eleven to enable SNAP/EBT payments, increasing accessibility to more than 4,000 sites in the US. This project was designed to address food insecurity and enhance convenience for vulnerable populations, offering SNAP recipients benefits, such as DashPass membership for two months to reduce barriers to fresh groceries. Additionally, there is a strong focus on technological advancement, with a specific emphasis on using AI and ML algorithms to enhance route optimization and predictive analytics to enhance efficiency and lower expenses within the fiercely competitive environment.

United States Online Food Delivery Market News:

• November 2023: DoorDash expanded its alcohol delivery service to New Jersey, tapping into the growing demand for convenient alcohol delivery. This move aligns with the trend among leading aggregators to offer a wider selection of beer, wine, and spirits to consumers, reflecting the evolving landscape of e-commerce in the alcoholic beverage industry.
• October 2023: Pizza Hut, LLC extended operating hours in thousands of stores, staying open until midnight or later to meet the late-night cravings of customers. Leveraging partnerships and technology, Pizza Hut ensured accessibility and maintained quality even during late-night delivery.
• May 2024: Uber Eats announced that is teaming up with Instacart to offer food delivery services in the United States, allowing customers to order from hundreds of thousands of restaurants through the Instacart app. Through this cooperation, users will benefit from a handy option that streamlines grocery shopping and meal delivery.

United States Online Food Delivery Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the United States online food delivery market from 2018-2032.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the United States online food delivery market.
• The study maps the leading, as well as the fastest-growing, markets. It further enables stakeholders to identify the key country-level markets within the region.
• Porter's five forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the United States online food delivery industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.