DoorDash widens grocery delivery service in Phoenix
Third-party delivery service DoorDash Inc. (NYSE: DASH) announced Monday it has signed deals with eight new supermarket chains, including some in Arizona, to increase its on-demand grocery delivery offering.
DoorDash is already a key delivery partner with Phoenix-based Sprouts Farmers Market Inc. (Nasdaq: SFM), Albertsons and Safeway and with Raley’s Cos., the parent company of Bashas’, Food City and AJ’s Fine Foods. Now the company and its team of independent contractors will be delivering groceries in the Phoenix area from El Super.
El Super, based in Paramount, California, is a Latino-focused grocery chain with five locations in the Phoenix-area. According to data from Chain Store Guide, El Super had $145.8 million in sales in the Phoenix area in 2022 and was the 15th largest grocery store chain in the Valley. By teaming up with DoorDash, El Super could grow its customer base by adding an online element to its brand.
DoorDash also announced it would be working with Lowe’s Markets, which has two locations in Arizona in Window Rock and Ganado, in the Navajo Nation.
“The grocers announced today recognize DoorDash as a source of incremental growth, accelerating what we believe to be the fastest-growing platform for grocery in North America,” Fuad Hannon, DoorDash’s vice president of new verticals, said in a statement. “We strive to be the rising tide that lifts all boats – driving growth for retailers while helping consumers stock up on groceries whenever and however is best for them.”
DoorDash also signed deals on Monday with out-of-state grocers CUB, Eataly, Fiesta Mart, Pruett’s Food, Stater Bros. Markets and Strack & Van Til.
Since 2020, DoorDash has added more than 100,000 nonrestaurant stores to its Marketplace and Drive platforms in North America. In 2022, the DoorDash recorded $53.4 billion in sales from its nonrestaurant deliveries. In its latest quarterly earnings, the company reported marketplace revenue of $16.5 million, which was up 26% from the same quarter a year ago.
DoorDash and its competitors have been criticized by restaurants and retailers for the high percentage of its cut from each sale, but so many retailers partner with platform because it is a plug-and-play system that doesn’t require massive tech investments.
Booze delivery from Aldi
Phoenix-area consumers will also get more options on DoorDash, including having alcohol delivered from Aldi, which is growing its presence in the Valley.
Earlier this year, DoorDash and Aldi signed a nationwide delivery deal, and then on Monday the companies announced they have expanded that deal to include having the discount grocery chain’s alcohol for sale on the San Francisco-based platform.
“In addition to giving merchants a new way to reach customers, on-demand alcohol delivery helps partners grow their business,” Hannon said “On DoorDash, adding alcohol may increase grocers’ average order value by up to 30%. Order values for U.S. convenience orders were on average over 50% higher when alcohol was added.”
Alcohol deliveries more than doubled on DoorDash from 2021 to 2022 and according to trade publication Beverage Daily, alcohol e-commerce is poised to grow 66% by 2025.