Oppenheimer: Restaurant&grocery delivery survey reveals higher spending

Investing.com -- A recent survey of 1,451 respondents indicates continued upside potential for the restaurant and grocery delivery sectors, suggesting growth in user spending and untapped opportunities.

The survey, conducted by Oppenheimer, shows that 64% of restaurant delivery users and 70% of grocery delivery users are spending more than they did six months ago, driven by product improvements such as faster delivery times and fewer order mistakes.

This trend has led to increased confidence, prompting a 2% boost in Uber Delivery and DoorDash (NASDAQ:DASH) estimates for gross transaction volume (GTV) and gross order value (GOV) for 2025 and 2026.

In the restaurant delivery sector, there is a substantial opportunity to further increase order frequency. Despite strong spending trends, 40% of restaurant delivery users remain infrequent customers, indicating room for growth.

"Product improvements can drive frequency," the survey highlights, with 60% of respondents citing faster delivery and fewer mistakes as the primary reasons for increased spending.

Moreover, 23% said they are attracted to the ease of app use and the convenience of avoiding cooking.

“Overall, 40% are infrequent users, implying there is still a large opportunity to drive frequency among existing users,” Oppenheimer said in a note.

However, macroeconomic factors have impacted cost-conscious consumers. Approximately 33% of non-users refrain from using restaurant delivery apps due to cost concerns. Interestingly, 71% of these consumers were unaware of the cost-saving benefits of monthly subscriptions such as Uber One or DashPass, highlighting a significant marketing opportunity to capture new users.

In contrast, the grocery delivery sector has lower penetration than restaurant delivery (57% vs. 67%), with 73% of non-users preferring to shop in person.

Despite this, grocery delivery services are showing strong retention, with only 7% of respondents reporting decreased spending over the last six months. Improved delivery speeds and order accuracy have helped drive higher spending among existing users.

Also, the survey finds that the partnership between Uber Technologies Inc (NYSE:UBER) and Instacart (NASDAQ:CART) has proven successful, with 82% of online grocery users now using Instacart to order from restaurants, while 38% of restaurant delivery users use the app.

“These results not only indicate positives for CART, but also suggest the partnership has been incremental to UBER’s existing user base, and is therefore an attractive acquisition candidate in our view,” Oppenheimer said.

The investment bank raised its price targets for Uber and DoorDash stocks from $90 to $95 and from $145 to $160, respectively.