Daily Brief: DoorDash And Instacart Are Going Head To Head In The Great Grocery Face-Off

Daily Brief: DoorDash And Instacart Are Going Head To Head In The Great Grocery Face-Off

over 1 year ago3 mins

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US delivery giant DoorDash announced on Wednesday that it’s teaming up with Canada’s biggest grocery chain.

What does this mean?

The takeout business isn’t what it was during the pandemic, when the only glimmer of light in our imprisoned existences was a well-seasoned enchilada. Now, foodies – or at least foodies that can afford to in these belt-tightening times – are choosing to buy restaurant-quality food inside restaurants. That’s encouraged DoorDash to expand into the grocery delivery market, which it sees as ripe for major growth going forward. More specifically, the company’s aiming to develop a network of dedicated delivery warehouses, which will allow partners to fulfill more orders than they would if their drivers picked up the products from a store. DoorDash has now found the first of those partners: it just signed an exclusive deal to build warehouses for Canadian grocery chain Loblaws that’ll see it handle 30-minute delivery for up to 8,000 products.

Why should I care?

Zooming in: The rivalry of the century.

The deal means DoorDash is now stepping on the toes of grocery delivery company Instacart, which used to be in an exclusive partnership with Loblaws. Expect this competition to continue: DoorDash is looking to make similar arrangements with grocery chains in other markets, while Instacart intends to make its own warehousing deals with some of the 750-odd retail partners it already has in North America. It’s not hard to see why: online US grocery sales are estimated to have topped $7 billion last month.

The bigger picture: DoorDash hits and hopes.

There’s a lot riding on this for DoorDash, given that investor confidence in high-growth tech businesses has collapsed. Just look at the company’s stock price, which has fallen nearly 60% this year alone. Still, if it’s able to successfully transition to a more platform-oriented business that offers logistics and warehousing, it could turn its fortunes around.

DoorDash stock
Source: Google Finance

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Inflation Continues To Get Out Of Hand In The UK

UK inflation image

Data out on Wednesday showed that inflation in the UK hit a 40-year high last month.

What does this mean?

This is not going to plan: the prices of UK goods and services were 9.1% higher last month than the same time last year – only a small increase from April’s 9%, sure, but proof-positive of the persistence of inflation right now. The main contributor to the uptick came from food prices, but the data was grim across the board, as prices in half of all categories measured rose by 7% or more. The worst is yet to come too, with the average price of gas – a major driver of rising prices – already up 12% this month from May. Throw in another jump in energy prices due in the fall, and traders are now betting that the Bank of England will double interest rates to 3% by the end of the year.

Price changes

Why should I care?

The bigger picture: The wage spiral in practice.

This rise in prices will only add to a cost-of-living crisis that caused railway workers to strike this week, and could cause others – namely teachers and mailmen – to do the same. But while the goal of an inflation-linked raise is an entirely fair one, it could also end up making things worse. For one, higher wages would increase company costs, and potentially encourage them to up their prices even more. And for another, they’d increase disposable income, leading to an increase in consumer demand and pushing prices higher still.

UK inflation vs wages

Zooming out: Brits need cheap.

The need to pinch pennies seems to have steered more shoppers toward budget clothing outlets. Primark reported this week that its revenue was 81% higher last quarter than the same time last year. The retailer also announced its first push into online shopping with a trial of a click-and-collect service – something analysts think could drive even higher footfall in its stores.

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