DoorDash has inked an exclusive arrangement with Canadian grocery chain Loblaws, under which the delivery company will build warehouses for the latter, the Financial Times reported.
The warehouses will facilitate 30 minutes-or-less delivery for between 5,000 and 8,000 Loblaws’ President’s Choice products. That brand, according to the Financial Times, has been licensed to a new DoorDash subsidiary.
The deal will intensify DoorDash’s competition with Instacart, which previously had an exclusive warehouse-building arrangement with Loblaws, according to the newspaper. Instacart will still deliver Loblaws’ items.
“Our ambition has always been to meet merchants where they are and to help them lean into . . . the digital convenience economy,” said Fuad Hannon, head of new verticals at DoorDash.
Terms of the deal were not disclosed.
The deal represents a new model for DoorDash as it works to expand into the delivery of grocery and convenience products in addition to restaurant meals. FT noted that the U.S. online grocery-sales market was worth $7 billion in May.
As Instacart proceeds with plans that require the warehousing of grocer-owned items for fast delivery, the Financial Times reported, DoorDash and Loblaws would not disclose the ownership arrangement for the Loblaw’s products Instacart will warehouse and deliver. Another grocery delivery company, GoPuff, is taking a solo approach, filling its warehouses with items it already has purchased.
Instacart, for its part, pushed recently into traditional DoorDash turf by agreeing to distribute drinks for a California fruit juice company, PYMNTS reported last week.
Read more: Instacart Creeps Further Into DoorDash’s Space With Juice Bar Partnership
Working with Southern California juice bar Pressed, Instacart users will be able to order off the menu, but also buy packaged products both fresh and shelf stable.
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