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If you’ve never heard of Waitr, you’re not alone—the regional company commands just 1 percent of meal delivery market share in the U.S., competing with the likes of Grubhub, Uber Eats, and DoorDash. But last week, Waitr lept into headlines after being purchased by billionaire Tilman Fertitta, who plans to bring the company public later this year. Consumer spending data shows why this relatively small business likely caught Fertitta’s eye.
Waitr captures the largest share of sales in its markets
Waitr may be available in only a limited number of mostly Southeastern cities, but it thrives in the markets where it has set up shop. Founded in Lake Charles, La. with a second Louisiana office now in Lafayette, Waitr has been strategic in monetizing markets that had previously been underserved by its competitors. The result is complete dominance—in April, Waitr earned 41 percent of meal delivery sales in the roughly 200 cities where it operates.
Fertitta is well-known as the owner of the NBA’s Houston Rockets, but he also owns the Golden Nugget Casinos and more than 60 restaurant brands. He’s seen firsthand that diner demand has shifted toward eating at home and noted how popular Waitr is in some parts of the country. His own restaurants, he said, prefer to use Waitr for delivery.
Waitr is growing like crazy
Last spring, Waitr received a funding infusion from New Orleans Saints’ quarterback Drew Brees who, like Fertitta, is a restaurant owner. He’s seen its value in action, crediting Waitr for increasing sales by more than 10 percent at his Walk-Ons Bistreaux and Bar locations. The money from Brees has allowed Waitr to expand into new territory and forge more restaurant partnerships, helping it grow faster than competitors in its markets. Over the past two years, Waitr’s monthly sales have increased twenty-four-fold in cities where it operates.
Waitr leaves customers hungry for more
Waitr diners are more likely to keep ordering than the average food delivery customer, which may be thanks to the company’s emphasis on customer experience. Restaurants work with Waitr to add photos to ordering menus, and Waitr creates stability in its delivery network by hiring drivers as employees, not contractors. If retention is in the details, these practices could help the company fend off competitors pushing into its territory. Currently, 30 percent of Waitr customers are still active one year after their first purchases, compared against an average of just 23 percent for industry competitors.
Fertitta says Waitr will trade on the Nasdaq once his purchase is finalized later this year. Industry leader Grubhub went public in 2014, but most of the other players in the market remain private companies. Time will tell whether Waitr can use its newfound prominence to expand into more U.S. regions—and whether those diners have an appetite for another food delivery app.
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