Grocery Roundup: DoorDash Onboards New Supermarkets; Instacart Reevaluates Future

As aggregators look to improve the economics of the model by getting more value out of their existing driver networks, DoorDash is going all in on grocery. In the past week, the company has announced expansions to its partnerships with two supermarket chains.

On Monday (July 11), Schnuck Markets, Inc., which operates 112 stores across four Midwestern states, announced that it is growing its partnership with the aggregator fivefold, expanding the number of its stores available on DoorDash’s marketplace from five to 25.

“Schnucks’ expanded partnership with DoorDash allows us to reach more customers and gives them greater access to our delicious deli and prepared food options and Schnucks signature items,” Chace MacMullan, senior director of digital experience at Schnucks, said in a statement. “Through DoorDash and our many other eCommerce options, … Schnucks continues to meet our customers where and when it’s most convenient for them.”

Similarly, Abingdon, Virginia-based supermarket chain Food City, which operates 138 supermarkets across five states, announced the expansion of its DoorDash partnership to offer delivery from 117 of its stores.

“Food City is committed to providing our loyal customers with the best products and services possible,” Steven C. Smith, the chain’s president and CEO, said in a statement. “Our eCommerce initiatives have really flourished throughout the pandemic, and we’re excited to have the opportunity to expand our partnership with DoorDash to include on demand delivery of a number of exciting new categories.”

The share of consumers ordering groceries on demand from third-party marketplaces is on the rise, according to the May edition of PYMNTS’ ConnectedEconomy Monthly Report, which drew from a survey of more than 2,600 U.S. consumers. The study revealed that the share of consumers using same-day grocery aggregators, such as Instacart, each month rose from 30% in March to 34% in April. In the same period, the share ordering delivery from grocers’ direct channels rose from 35% to 38%.

Read more: 19M More Consumers Went Online to Bank, Buy and Pay Bills in May 2022

Instacart Makes Major C-Suite Changes

Instacart is on a tear, announcing major changes on an almost weekly basis.

Most recently, the company announced Tuesday (July 12) five significant changes to its leadership. Apple veteran and former vice president of retail for Instacart Chris Rogers has been bumped up to chief business officer.

“We believe that more closely aligning our retail and brand partnerships organizations under Chris’ leadership will further align teams in support of our retail enablement vision and create more connective tissue as we continue to innovate for our hundreds of retail partners and thousands of brand partners,” the company said in the announcement.

Former Chief Technology Officer Mark Schaaf is stepping down “to take a break with family and pursue new opportunities.” Replacing him in the role is Varouj Chitilian, the aggregator’s vice president of engineering. Meanwhile, Head of Infrastructure JJ Zhuang is stepping into a role that the company has just created, chief architect, which involves making engineering decisions for the aggregator.

Additionally, the company’s former Vice President and Head of Product Daniel Danker was promoted to chief product officer, and former Head of Marketing Laura Jones was promoted to chief marketing officer.

This wave of changes suggests that Instacart may be coming up against some challenges in the post-lockdown eGrocery space, especially as grocers have been building out their own in-house fulfillment capabilities, forcing the aggregator to rethink its plans for the future.

Kroger Boosts Ad Capabilities in Face of Inflationary Pressures

In recent months, grocers have been growing their ad businesses with new offerings as they struggle with new margin pressures from rising food costs.

The Kroger Co., for one, announced Monday that its retail media business, Kroger Precision Marketing (KPM), is partnering with eCommerce software company Pacvue on a tool for advertisers, Pacvue Advertising for Kroger, enabling them to more efficiently manage their campaigns.

“We’re thrilled to welcome Pacvue as an API partner, and we look forward to working together to bring new innovation to the retail media industry,” Michael Schuh, vice president of product strategy and innovation at KPM, said in a statement.

The solution offers advertiser customizable dashboards with data insights among other analytics tools powered by artificial intelligence (AI). Pacvue, for its part, has worked with Kroger competitors Amazon, Walmart, and Target as well as leading grocery aggregator Instacart.

Last quarter, Kroger added over 100 new brands as advertising partners, as the grocer’s CFO Gary Millerchip told analysts on a call in June discussing the company’s fiscal year 2022 first quarter results.

“We continue to enhance our market-leading capabilities and have entered into new agreements with three leading advertising management platforms, allowing our CPG partners to manage their on-site ad campaigns more effectively,” Millerchip said at the time.

Related news: Kroger Leverages Data Analytics in the Fight Against Inflation

Competitors have also been expanding their advertising businesses. For instance, in late June, Albertsons Media Collective, the retail media arm of grocer Albertsons Companies, announced that it is partnering with advertising technology company The Trade Desk to offer new audience performance measuring tools for advertisers.

See also: Albertsons Boosts Ad Offerings