Daily Harvest has seen its sales drop by more than half since May, according to data from Bloomberg Second Measure. The pre-packaged meal startup company, which is facing customer lawsuits over a high-profile food illness incident this summer, credited declines to a decision to reduce advertising spending.
Daily Harvest’s sales dropped by about 55% in September compared with May, and 36% compared to the prior year, according to the data, which is based on billions of anonymized credit card transactions. The company’s customer base also shrank from May to September, the data show.
Daily Harvest said that it anticipated a decline after it cut its marketing outlays by 75% in the May-to-September period, citing the rising cost of ads. “We knew this carefully considered spending reduction would result in a change in volume,” a spokesman wrote in an email, pointing to the company’s belief in efficient spending. The spokesman said that Daily Harvest is a “thriving business serving millions of consumers that generate hundreds of millions in annual revenue.”
The startup said there was no connection between its food illness episode and its decline in sales.