DoorDash sees ‘rapid growth’ in grocery delivery

Total orders grew 27%, to 512 million, for the quarter and revenue at the company leaped 40%, to more than $2 billion.

DoorDash Inc. has announced impressive earnings for the first quarter of 2023, with sales growth outpacing the company’s expectations. The San Francisco-based tech company noted a “significant” rise in non-restaurant orders, particularly in the grocery and convenience store categories, according to the company’s earnings call on Thursday. DoorDash’s total orders grew by a substantial 27%, up to 512 million, and its revenue jumped an impressive 40%, surpassing $2 billion.

“Total orders from our non-restaurant categories in Q1 2023 remained significantly higher than year-over-year growth in our U.S. restaurant category,” the company noted in its quarterly report. “Based on third-party data, we believe we gained category share in the U.S. convenience and U.S. grocery categories during the quarter.”

DoorDash CEO Tony Xu credited the company’s success in the grocery and convenience categories to “improvements in product quality,” highlighting DoorDash’s partnership with Aldi as a key factor. “Adding selection, players like Aldi…we now serve 20-plus of the top grocers in the U.S.,” he said.

Xu added that the company is also working on improving the quality of the DoorDash experience for grocery shoppers, with a focus on minimizing product replacements. “A big part of this stems from the fact that today, physical stores, grocery stores, that is, don’t always know exactly what’s on their shelves. And that’s quite a hard problem to solve for a variety of reasons,” he explained. “We can literally go on for hours to talk about all of the different reasons. But that’s the problem that we’ve gotten better at in terms of making sure that we can get you exactly what you ordered.”

Despite DoorDash’s success in the grocery delivery market, Xu believes there is still room for improvement. “I think that’s because the offline experience is still superior to the online experience, which means we have a long way to go to making sure that we can make the quality of the experience perfect, meaning you get exactly what you order, that you can get it from all the places that you want delivery from and that the prices are affordable or what you would expect to pay in store,” he said.

DoorDash’s growth in the grocery delivery market was not unexpected, given the company’s focus on promoting the new vertical. In March, the company expanded its delivery options, allowing customers to schedule their orders further in advance or receive them faster if necessary. It also improved its search function by allowing customers to view their previous orders.

The company made a significant marketing push earlier this year, including an ad in the 2023 Super Bowl titled “We Get Groceries,” featuring celebrities such as Raekwon The Chef of hip-hop supergroup The Wu-Tang Clan and Matty Matheson of the Hulu series “The Bear.” Additionally, DoorDash launched its own credit card, the DoorDash Rewards Mastercard, offering 4% cash back on DoorDash and Caviar purchases and 2% on all other non-DoorDash grocery purchases.

DoorDash’s strong performance in the first quarter of 2023 reflects the company’s investment in the non-restaurant side of its business, including grocery and convenience store deliveries. As DoorDash continues to improve its product quality and the overall online grocery delivery experience, the company is poised for even greater success in the future.

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