The acquisition, announced Thursday (Oct. 29), creates a combined entity offering grocers and retailer access to DoorDash’s delivery network and Instacart’s grocery and fulfillment technology, the companies said in a Thursday (Oct. 29) news release.
“Grocery is one of the hardest things to get right online. Someone has to pick a ripe avocado, find a substitute you’d choose yourself, and get the ice cream to you before it melts,” said Tony Xu, co-founder and CEO of DoorDash.
“Instacart has spent years learning to do that well for grocers, while DoorDash has built a delivery network and technology that local stores rely on every day.”
The release says the deal means that Instacart customers can now shop at more than 50,000 new stores in addition to the close to 100,000 stores currently on the platform, with the two companies continuing to operate as independent entities.
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Consumers who hold memberships with DoorDash DashPass program and Instacart+ will now pay one membership fee rather than two, the release said.
DoorDash’s Dashers and Instacart’s Shoppers will also gain new opportunities to earn, “with more choice over when and how they earn, whether that’s grocery orders on a quiet day, restaurant orders at peak times, or both,” according to the release.
The companies stressed the idea of the deal benefiting local stores as people increasingly shop for groceries and other products online.
“They expect fast, affordable delivery and an easy way to order,” the release said. “The biggest online retailers and grocers are racing ahead, building their own delivery fleets, warehouses, membership programs, and AI shopping assistants. A grocer or retailer running on thin margins cannot build all of that alone, and with AI, the playing field risks being tilted even further away from local commerce.”
The announcement comes days after reports that Instacart was seeking a buyer, and had held acquisition talks with Uber as well as DoorDash. CNBC had reported Wednesday (Oct. 28) that a deal announcement was imminent.
PYMNTS Intelligence data, from the report “The New Checkout: Crimped Consumers Lean Into Online Retail and Digital Wallets,” shows that online grocery shopping appeals to consumers under pressure, who were 6 percentage points more likely than lower-stress consumers to purchase their groceries through digital channels.
The research “suggests digital discounts and greater budget control could contribute to that difference,” PYMNTS wrote earlier this month.
“Convenience could also play a role for people with limited time to visit a store. The findings don’t establish which explanation carries the most weight.”
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