Three numbers to start your day:
European Food Delivery Giant Delivery Hero Will Pay $4 Billion
—to buy the South Korean rival Woova. The merger comes at a time when consumer demand for food delivery is surging.
Why? Well, one huge driver is that there’s a flurry of companies willing to lose money doing it.
and Postmates are all competing for market share in the U.S. And Asia is seen as a huge opportunity—that’s because the rising wealth in Asian countries is expected to boost demand.
But things aren’t all rosy.
Grubhub’s CEO recently said in a letter to shareholders that the business wasn’t as good as his competitors seemed to think. And there might be something to it. The food delivery industry has margins that are mercilessly thin and customers who flock to whoever offers discounts or free delivery. Worst of all, scale doesn’t improve the poor economics of the business.
90% of Americans Aged 13 to 24 use Snapchat
That’s according to JMP Securities Ronald Josey. And that user group is highly coveted by advertisers. Advertisers have always liked to reach young consumers, but now it’s not just because they’re young. It’s because young consumers, in particular, are getting harder and harder to reach through traditional advertising.
And that makes
(SNAP) valuable, Josey says. And sure, its stock trades at a higher multiple than its competitors, but with a revamped sales force, Josey thinks it can start to capitalize on its unique position of reaching young people.
Retail Sales Grew 0% in November
That’s according to recent data from the Commerce Department. And it’s, by the way, not including sales of autos and gas which tend to be volatile.
That zero growth is a wearingly tepid start to the holiday shopping season, which unofficially kicks off the day after Thanksgiving. This holiday season is six days shorter than last years—and that only adds to retailers’ concerns.
And there’s more bad news: the data showed that sales of holiday shopping stalwarts like clothes, electronics, sporting goods stores and department stores didn’t just show zero growth—those sales actually fell.
Numbers by Barron’s is our daily podcast. Find out more here.
Write to today’s host Ben Walsh at firstname.lastname@example.org