The Price We Pay For Convenience

Delivery apps are training us to be comfortable paying more for the same thing, but how much more?

Delivery Costs Far Exceed Carryout

Source: Company sites and apps. *Delivery fee varies based on location.

Note: For how I conducted this analysis, click the footnote

¹

• Delivery is nothing new but the apps that support it these days are making it more costly for the end consumer. It’s no matter of just paying a tip but the various fees associated with the added convenience significantly increase the end price.

• I analyzed carrying out (CO), delivery from their own app (Del./App), or from DoorDash (DD) for three companies: Domino’s DPZ 0.00, Chipotle CMG 0.00, and Sweetgreen SG 0.00.

• On average, ordering from the company’s native app, was 63% more expensive than if I went to go pick it up.

  ²
  If I used DoorDash, the cost was 62% more expensive than had I just picked it up.
  ³

• What is interesting too was that when you compare using DoorDash for Chipotle and Sweetgreen versus their native apps, the price was ~4% more for the exact same thing.

• The question we need to ask ourselves is what’s the tipping point that will convince consumers to physically go pick up their food instead of ordering? Does it even exist?

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Until next time,

Cedar Grove Capital

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Twitter: @paulcerro

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Disclosure: I/we currently have stock, option, or similar derivative position in Domino’s (DPZ) at the time of writing this article.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. This article is not meant to be taken as investment advice and you should do your own due diligence prior to taking any action.

1

For this analysis, I took three widely talked about companies and ordered their basic meal with a 20% tip from each. All were in NYC and only a few blocks away from me. Domino’s I ordered their 2 for $6.99 each, Chipotle was a bowl with no extras, and Sweetgreen was their harvest bowl with no extras.

2

This figure includes Domino’s. If I removed it, it would be 55% on average.

3

This doesn’t account for Domino’s since the company does not use third-party apps to facilitate delivery orders.