Shares of Instacart parent Maplebear Inc (NASDAQ: CART) are trading lower on Monday following an announcement that Kroger Co (NYSE: KR) is significantly expanding its delivery partnership with DoorDash Inc (NASDAQ: DASH), a move that threatens Instacart’s market position in grocery delivery.
What Happened: Beginning Oct. 1, nearly 2,700 Kroger locations will become available on DoorDash’s platform, offering customers access to the grocer’s complete product selection with delivery in as fast as one hour. The expansion covers multiple major Kroger banners, such as Mariano’s, Fred Meyer, Ralphs and Harris Teeter.
Instacart shares were down on the news, while shares of Kroger and DoorDash were moving higher at last check, according to Benzinga Pro.
The partnership is a substantial threat to Instacart, which has historically been a dominating force in the online grocery delivery space. Kroger, one of America’s largest traditional supermarket chains, cited strong customer demand for its stores on DoorDash as a key driver for the nationwide rollout.
“Customers are looking for more convenient ways to shop at their local Kroger store, and delivery is an increasingly important way they engage with us,” said Yael Cosset, Kroger’s chief digital officer.
DoorDash has been quickly expanding its grocery offerings since launching the category in 2020. The company reported that over 25% of its global monthly active users ordered from categories beyond restaurant food, including groceries, during the second quarter. DoorDash boasts a global monthly active user base of 42 million customers.
Other than basic delivery services, Kroger and DoorDash plan to collaborate on retail media initiatives and new distribution models. The collaboration could potentially create additional revenue streams that could further pressure Instacart’s business model.
CART Price Action: Maplebear shares are down 8.72% at $38.63 at the time of publication on Monday, as seen on Benzinga Pro.
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