US food delivery company DoorDash informed today that it has teamed up with Canada’s largest grocer, Loblaw Companies, to handle deliveries within 30 minutes for about 5,000 to 8,000 items sold under Loblaw’s President’s Choice brand. The new service, called PC Express Rapid Delivery, will kick off DoorDash’s Rapid Delivery program from purpose-built fulfillment centers, supplied by Loblaw and owned and operated by DoorDash. Rapid Retail Canada Inc., a DoorDash subsidiary, will be the retailer operating under the PC Express Rapid Delivery brand.
Loblaw Companies is a Canadian retailer encompassing corporate and franchise supermarkets operating under 22 regional and market-segment banners, including Loblaws and Real Canadian Superstore, as well as pharmacies, banking and apparel. Financial details of the deal were not disclosed.
“Collaborating with DoorDash on rapid delivery services enables us to enhance our already existing PC Express offering by adding 30-minutes-or-less delivery to meet customers' growing interest in on-demand delivery options,” said Lauren Steinberg, senior vice president of Loblaw Digital.
The agreement is the first of its kind for DoorDash as it looks to diversify its offerings to include grocery deliveries and convenience items in addition to restaurant meals. DoorDash is the US market leader in restaurant delivery and tries to establish similar arrangements with grocery chains in other markets, including the US where online grocery-sales market was worth USD 7 billion in May, according to report by the Financial Times.
In recent years the company has grown rapidly and is competing with Uber Eats for the market lead in major markets around the world.
In 2020, Uber Eats strengthened its position in the U.S. market for online food ordering and delivery by acquiring the number four in the market, Postmates in a USD 2.65 billion all-stock takeover. (inside.beer, 6.7.2020) One year later Uber Eats acquired for about USD 1.1 billion the leading on-demand alcohol marketplace in North America Drizly, often referred to as the ‘Amazon for liquor’.
The same year, DoorDash acquired European rival Wolt in an all-stock deal valued at EUR 7 billion (USD 8.1bn). Finland-based Wolt was founded in 2014 and has since expanded its delivery service for restaurants, stores and businesses to customers in 23 countries mainly in Europe. (inside.beer, 10.11.2021)
“Our ambition has always been to meet merchants where they are and to help them lean into . . . the digital convenience economy,” said Fuad Hannon, Head of New Verticals at DoorDash.
GoPuff, another American consumer goods and food delivery company headquartered in Philadelphia has taken a separate approach than DoorDash. As of October 2021, the company operates in over 650 US cities through approximately 500 microfulfillment centers where the company sells goods it already has purchased before.
It seems that the markets for online ordering and delivery of restaurant meals as well as grocery items and beverages are converging and - after a strong consolidation - the market will consist of only a few players. Now the time seems to have come for the players involved to position themselves and quickly occupy the relevant markets.