by Mish Shedlock, Mish Talk:
Consumers are reining in their spending on pandemic-era luxuries and conveniences, just as investors are doing the same.
The Wall Street Journal discusses The Decline of the Nice-to-Have Economy
- In 2020, Nestlé bought Freshly, a home-meal delivery service, for $950 million. At its peak during the pandemic, Freshly said it was delivering more than one million meals a week to Americans. Yet Nestlé is shutting down home delivery of Freshly meals this month, citing shifting consumer demand. Nestlé didn’t respond to requests for comment.
TRUTH LIVES on at https://sgtreport.tv/
Goodbye, used-car vending machines and 15-minute meal delivery. It’s the decline of what columnist Christopher @mims calls the “nice-to-have” economy. https://t.co/w8nnmDlCQg
— The Wall Street Journal (@WSJ) January 28, 2023
- Meal-kit startup Blue Apron‘s revenue has declined and its valuation has collapsed, and the company is now in danger of being delisted from the New York Stock Exchange as its share price lingers below $1. Blue Apron didn’t respond to requests for comment.
- The meal-kit market leader, Berlin-based HelloFresh, has fared better. The company saw a spike in demand during the pandemic, and anticipates continued growth in revenue of at least 25%, year over year, according to a spokeswoman. HelloFresh’s profits have shrunk due to higher food and marketing costs, however, as it tries to retain customers who are rethinking their household budgets, the company has said.
- In the so-called 15-minute delivery category, the ultimate pandemic-era indulgence, many startups have already thrown in the towel. In March, New York and Chicago instant delivery startup Buyk declared bankruptcy. In June, Jokr ended its operations in the U.S. And in December, embattled delivery startup Gorillas sold itself to larger and more successful rival Getir.
- As for companies delivering hot food from restaurants, DoorDash has said its customers are changing their behavior by ordering fewer items or choosing cheaper options, such as fast food. This has contributed to slower revenue growth for DoorDash and competitors such as Uber Eats.
