Instacart Launching Prepared-Food Delivery: What does this mean for DoorDash and the Food Delivery Market?
By an ex-Whole Foods Shopper and DoorDash driver
Bloomberg posted an article yesterday , Jan. 13, reporting on Instacart launching prepared-food delivery from grocery stores. As a victimized DoorDash driver and DASH covered call seller, the potentially bad news this meant for DoorDash drew me in. However after reading it, I realized this news is most likely meaningless in terms of its overall effect, and that I don’t like Daniel Danker, Instacart’s head of product.
Will this change lead to an increase in overall orders for InstaCart? Probably. Take-out is ordered more frequently than grocery orders. *InstaCart isn’t publicly traded, but is preparing for a 2022 IPO.
But what’s to stop DoorDash and the other big dogs from doing the same thing? Why aren’t they already?
If Tony Xu, CEO of DoorDash, thought prepared grocery store food would increase DASH’s bottom line, believe me they’d offer it (DASH has yet to turn a profit). DoorDash is already partnered with Albertsons, which includes more than 2,700 grocery stores across the country like Acme and Safeway, as well as Walmart. Tony’s a smart guy, and probably realizes there’s minimal demand for grocery store prepared food—especially from Acme or Walmart. It’s usually soggy and gross, and just as unhealthy—if not more—than take-out from restaurants, which is why this statement from InstaCart’s Danker is ridiculous:
“[Prepared grocery store food] is cheaper, healthier and fresh. We’re calling it a breakup with takeout.”
Literally none of that is true. At least take-out from restaurants is made to order, “prepared food” means it was made at God knows when, and has been sitting on a shelf for hours. And a sushi roll at Wegmans costs $17. Whole Foods is probably the ‘top of the line’ in terms of quality for grocery store food, and they just got busted for rats in their deli meat.
This move won’t hurt Instacart at all, and if I was an investor I’d like that they’re exploring new ways to increase revenue. However I hope they’re keeping their expectations low, because if someone’s craving general tso’s chicken, sushi or a sandwich, they’re not considering what Publix has in the prepared food section.