Takeout Apps Expand to Groceries -- WSJ
03 Octobre 2019 - 09:02AM
Dow Jones News
By Heather Haddon and Jaewon Kang
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (October 3, 2019).
Food-delivery companies are adding supermarkets and convenience
stores to their order queues.
DoorDash Inc. and Postmates Inc. are among the companies
striking deals beyond restaurants to expand their reach and
revenue. In doing so, they face competition from rising food sales
at Amazon.com Inc., from grocery-delivery specialist Instacart Inc.
and from online supermarkets such as FreshDirect LLC and
Koninklijke Ahold Delhaize NV's Peapod.
U.S. consumers spend more on groceries than they do at
restaurants on average annually, according to the Labor Department,
making delivering groceries an opportunity for companies that have
mainly focused on restaurants until now.
"We view food as the wedge," Postmates Chief Operating Officer
Vivek Patel said in an interview.
Postmates said Wednesday that it would start making deliveries
from 174 Walgreens and Duane Reade stories in Manhattan and
Brooklyn. Postmates said it hopes to take the partnership with the
owner of those chains, Walgreens Boots Alliance Inc.,
nationwide.
Postmates also makes deliveries from Seven & i Holdings
Co.'s 7-Eleven stores and Walmart Inc., the largest U.S. food
retailer.
Walmart products are also available for delivery on DoorDash and
some regional services. DoorDash in August signed an agreement with
e-commerce platform Mercato Inc. to make same-day deliveries from
about 750 independent grocers in 22 states.
Uber Technologies Inc.'s Uber Eats division is testing grocery
delivery in Australia and is in talks with some European and North
American chains, executives said.
Grocery delivery is growing, but many customers have reported
problems with the online-ordering systems and with receiving the
deliveries. As a result, customers are hesitant to make a habit of
paying more than they would at the supermarket. A Bernstein survey
of 1,037 shoppers this summer found that 56% don't shop for
groceries online more often because they believe prices are lower
if they go to the supermarket themselves.
Grocery orders tend to be bulkier than restaurant takeout, and
drivers often have to wait longer for them to be prepared at
stores. Grubhub Inc., one of the biggest food-delivery companies,
has decided to stay focused on expanding its service from
restaurants rather than add grocers.
And delivery companies that until now focused on restaurants
face tough competition from established grocery services and
expanded offerings from supermarkets themselves. Kroger Co. is
investing millions of dollars in a network of warehouses to be run
by Ocado Group PLC that it plans to use to expand its delivery
reach.
Instacart, Target Corp.'s Shipt Inc. and Amazon have worked for
years on ways to more efficiently prep grocery orders and get them
delivered. Amazon executives have said their 2017 purchase of Whole
Foods was motivated in part by plans to use the natural grocer's
stores as bases for grocery deliveries.
"It's actually hard to do groceries well," Instacart's chief
business officer, Nilam Ganenthiran, said in an interview.
Instacart delivers from more than 300 supermarket chains, and was
valued at around $7.8 billion when it raised $871 million last
year.
DoorDash is working to tailor its operations at supermarkets to
best suit deliveries, said Casey North, a company vice
president.
But the upside for delivery companies that figure out grocery
delivery is high, said Robert Mollins, an analyst at Gordon Haskett
Research Advisors. Adding supermarkets to their pickup lists could
help delivery companies make more efficient use of their fleets
because supermarket orders tend to come in earlier in the day than
the evening rush for restaurant orders, he said.
Nadia Graham, a 24-year-old intern at a Denver marketing
company, orders groceries via Amazon about three times a week
because she trusts its drivers more than those from other services.
She says drivers for delivery apps often bring her the wrong foods
or try to leave the delivery at the entrance to her apartment
complex.
"The reason we get food delivered is so that we get food
delivered to our door," she said.
Write to Heather Haddon at heather.haddon@wsj.com and Jaewon
Kang at jaewon.kang@wsj.com
(END) Dow Jones Newswires
October 03, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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