DoorDash CEO on grocery delivery business: ‘grocery delivery is at its infancy’

on Jun 21, 2021
  • DoorDash partnered with Albertsons on same-day grocery delivery.
  • Chief Executive Tony Xu says grocery delivery is only at its infancy.
  • DoorDash shares are currently close to 4% up on the intraday chart.

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Customers can now shop for groceries at Albertsons’ countrywide stores and have them delivered to their homes on the same day as DoorDash Inc (NYSE: DASH) partnered with the American grocery chain on Monday. Albertsons’ subsidiaries, including Jewel-Osco, Vons, and Safeway, are also part of the collaboration announced on Monday.

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DoorDash opened at $168 per share on Monday and is currently exchanging hands at $174 per share. This compared to its year-to-date high of $215 per share (£154.32 per share) in early February. At the time of writing, DoorDash has a market cap of close to $57 billion.

CEO Tony Xu’s remarks on CNBC’s “TechCheck”

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DoorDash is a notable name in the grocery delivery business and has partnerships with giants like Walmart and Hy-Vee. Commenting on the Albertsons news, CEO Tony Xu said on CNBC’s “TechCheck”:

“What we have learned, in three years after first starting our entry into grocery with white label delivery, powering the likes of Albertsons, Walmart, Hy-Vee and many others, is that grocery delivery is really just at its infancy. The pandemic further accelerated the need to get more and more things inside the neighbourhood brought to you.”

Tony said that the business model for restaurant delivery and grocery delivery is the same on one essential component – fast delivery.

“As the largest on-demand commerce platform in the U.S., people expect really fast deliveries from DoorDash. It started with restaurant meals, and now it’s happening with grocery stores,” the chief executive commented.

DoorDash delivers groceries in under an hour

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Thanks to express delivery, consumers can now order groceries and have them delivered in under an hour without any restrictions like waiting queues, minimum order size, slotted times, or schedules.

“That is very powerful, especially as it is happening through the DoorDash app as well as through the grocers’ channels – their websites and their apps. So, you really get this density that makes the economics flow for everybody,” said CEO Tony Xu.

The news comes a week after DoorDash partnered with PetSmart to offer on-demand delivery of pet products.

DoorDash shares have recovered more than 50% from a year-to-date low of $113 per share in the second week of May. In comparison, the stock had started the year at $139 per share. DoorDash debuted on the New York Stock Exchange at $175 per share in December 2020.  

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