DoorDash Heats Up Grocery Delivery Race With Albertsons Alliance

DoorDash Inc., the largest meal-delivery company in the U.S., is teaming up with Albertsons Companies to offer grocery delivery on its marketplace app in a bid to capture a share of the fast-growing sector dominated by Instacart Inc. and Walmart Inc.

The partnership will enable DoorDash customers to shop across Albertsons’ nearly 2,000 stores -- including Safeway, Vons and Jewel-Osco, the companies announced Monday. Albertsons’ offerings will be available on DashPass, DoorDash’s subscription program that provides members unlimited free delivery and reduced service fees from thousands of restaurants, grocery and convenience stores.

While San Francisco based DoorDash has offered same-day grocery delivery, including from Walmart, through its white-label fulfillment platform, the alliance is its first major step into groceries. DoorDash will list more than 40,000 grocery items from Albertsons’ stores on its marketplace, placing it in direct competition with Instacart.

“Consumers’ desire to get everything in their neighborhood on-demand has increased dramatically,” said Fuad Hannon, head of new verticals at DoorDash.

DoorDash shares jumped on the news, gaining 4.2% to $174.57 after being down earlier in New York trading. Albertsons shares were up 1.2%.

DoorDash dominates U.S. food-delivery and has increased its market share over rivals like Uber Technologies Inc. and Grubhub Inc. amid the shift to ordering from home as the coronavirus pandemic shuttered indoor dining. However, despite cities re-opening, demand for food delivery remained resilient, with DoorDash nearly tripling revenue during the first quarter. Since then, DoorDash has pushed into new business lines like retail, through a partnership with Bed Bath & Beyond in May and most recently PetSmart, as well as expanded convenience store offerings in an effort to capture more customers now accustomed to fast, on-demand delivery.

DoorDash President Payne on PetSmart Deal, Growth Strategy (Video)

The company has also used the momentum to boost its international presence by launching in Japan as its first foray into Asia and expansion outside the U.S., Canada and Australia.

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