Instacart Inc. is expanding its delivery partnership with 7-Eleven Inc. in a bid to capture part of a fast-growing convenience store market dominated by DoorDash Inc.
The San Francisco-based company is adding 4,000 7-Eleven locations, bringing the total to 6,000 stores in 33 states and Washington. D.C., and pledges to get deliveries to customers in as little as 30 minutes.
Instacart began working with 7-Eleven last year, delivering thousands of everyday items, including pantry staples, alcohol, snacks and over-the-counter medications. The companies plan to add alcohol delivery to more states and stores in the coming months, Instacart said in a statement Friday.
“Sometimes people need a full fridge and pantry restock and other times they just need a few things quickly like some snacks for the kids, a bottle of wine for dinner or over-the-counter medication to nurse a headache,” said Instacart vice president of retail Chris Rogers.
Convenience store sales soared during the pandemic, with online orders rising 346% last year, compared with a 121% rise for grocery stores, according to market research firm Edison Trends. Instacart convenience store orders have increased 350%, Rogers said.
Meanwhile, U.S. online grocery orders for pickup and local delivery totaled $6.6 billion in April 2021, according to data from the latest survey from consulting and research firm Brick Meets Click and grocery ecommerce platform Mercatus USA Inc. That was a 24.5% increase compared with $5.3 billion in such sales in April 2020, but a 7.0% decrease compared with March 2021’s online total of $7.1 billion.
Instacart now trails DoorDash
Instacart has fallen behind DoorDash, which began partnering with convenience stores last April, and Uber Technologies Inc., which recently teamed up with SoftBank Group Corp.-backed GoPuff to offer a larger inventory of convenience and grocery-store items. GoPuff commanded most of the convenience market prior to the pandemic and lost its lead when DoorDash launched its virtual convenience store DashMart last summer.
Instacart is the second-largest grocery delivery and pickup company in the U.S., with 46% of the market in March, according to Bloomberg Second Measure data, following closely behind Walmart Inc. Instacart recently expanded the number of stores where it accepts food-stamp payments, an area of online grocery that has been dominated by Walmart and Amazon.com Inc.
Instacart has been mulling an initial public offering this year and announced a $265 million funding round in March that valued the company at $39 billion.
Digital Commerce 360’s James Melton contributed to this story.Favorite