Instacart expands deal with 7-Eleven to take on DoorDash

[NEW YORK] Instacart is expanding its delivery partnership with 7-Eleven in a bid to capture share of a fast-growing convenience store market dominated by DoorDash.

The San Francisco-based company is adding 4,000 7-Eleven locations, bringing the total to 6,000 stores in 33 states and Washington DC, 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 346per cent last year, compared with a 121 per cent rise for grocery stores, according to market research firm Edison Trends. Instacart convenience store orders have increased 350 per cent, Rogers said.

Instacart has fallen behind DoorDash, which began partnering with convenience stores last April, and Uber Technologies, which recently teamed up with SoftBank-backed GoPuff to offer a larger inventory of convenience and grocery store items. GoPuff commanded the vast majority 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 US, with 46 per cent of the market in March, according to Bloomberg Second Measure data, following closely behind Walmart. 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.

The company has been mulling an initial public offering this year and announced a US$265 million funding round in March that valued the company at US$39 billion.

BLOOMBERG