Consumers who are social distancing are looking for viable solutions to stay safe and healthy. Coronavirus has so far infected nearly 474,968 people worldwide and more than 68,489 people just in the United States.
With major cities like New York under lockdown, food delivery is in demand, boosting meal kit services at large.
Food Delivery Service in Demand
Personal sanitization and avoiding interactions could help curb the spread of coronavirus. Additionally, avoiding big-box stores could help reduce interactions. Hence, keeping the household fed via delivery services is both a necessity and also a complicatedtask. Online delivery can be risky for both consumer and the person bringing food.
Well, the problem isn’t the food. According to the Food and Drug Administration (FDA), so far there has been no evidence that coronavirus is transmitted from food or food packaging.
While cooked food cannot transmit the virus, the risk can be reduced if recipients ask delivery persons toleave the food outside the door. Consumers can tip electronically or place cash outside before the delivery arrives.
Some private players are already making the most of this opportunity. DoorDash’s default delivery option is "leave it at my door," though one can change that option to "hand it to me”, whenever required. The company has set an example by waiving commission fees for independent restaurants in the United States, Canada, Puerto Rico and Australia for 30 days. Moreover, DoorDash is collaborating with United Way Worldwide to provide groceries and prepared food for food-insecure households.
3 Stocks to Watch
As Americans stay confined at home, food delivery sales have increased. In such scenario, these three food delivery stocks are poised to grow.
Our first choice is
Blue Apron Holdings, Inc. ( APRN - Free Report) , adirect-to-consumer platform that delivers original recipes, and fresh and seasonal ingredients. Shares of Blue Apron Holdings have risen 10.5% in the past month as consumers who are social distancing favor online grocery pickup or delivery services. In fact, in the beginning of March,Blue Apron had said it has seen a “sharp increase” in demand for its meal kits and is trying to meet the greater number of orders
This Zacks Rank #2 (Buy) company’s expected earnings growth rate for the current year is 4.3%. You can see
the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Next we have
Domino's Pizza, Inc. ( DPZ - Free Report) , a Zacks Rank #2 company that operates as a pizza delivery chain. The restaurant chain has a well performing delivery service, which accounts for about 55% of total orders. The pizza chain boasts17,000 stores in more than 90 countries. It has now began implementing its ‘Contact Free Delivery’ service and is expected to hire about 10,000 workers in the United States alone to meet increased orders. The company’s expected earnings growth rate for the current year is 11.9%.
Lastly, we have
Grubhub Inc. ( GRUB - Free Report) that provides an online and mobile platform for restaurant pick-up and delivery orders in the United States. The company is offering contact-free delivery service and also deferring commission fees for several restaurants. The company recently launched Grubhub Community Relief Fund that allows recipients to leave donations that could benefit delivery drivers and restaurants impacted by dining room closures.
This Zacks Rank #3 (Hold) company’s expected earnings growth rate for the next year is more than 100%.
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