DoorDash CEO: Grocery delivery business has a long way to go

DoorDash CEO Tony Xu does not have a friendly take on grocery delivery as Instacart works to get its IPO, even though his own company is a major player in the segment.

Xu was at Goldman Sachs’ Communacopia Technology Conference in San Francisco this week and said he believes consumers think grocery delivery is worse than the experience of going to the store and buying products, according to reporting by PYMNTS. 

Xu said the grocery delivery business has a “long way to go” and noted out-of-stocks and insufficient replacements as problems.

Instacart, however, appears to be thriving. In filing with the Securities and Exchange Commission, Instacart noted its revenue last year was $2.6 billion, which is a 39% increase year-over-year, and through the first half of 2023 the San Francisco-based company has pulled in $1.5 billion, a 31% bump compared to the first half ofin 2022.

During DoorDash’s second quarter earnings call, Xu boasted about how his company has created a multi-billion-dollar grocery business from essentially nothing, and it was “ready for primetime exposure,” according to PYMNTS. DoorDash recorded a record 532 million orders during Q2.

Xu claimed DoorDash, which is also based in San Francisco, was growing faster than any other platform and was “gaining share dramatically across all categories, specifically grocery.”

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PYMNTS also noted Instacart has eliminated consumers’ need to consider proximity in their decision about where to shop for groceries, and as the company continues to grow it may come to be an even more essential part of how consumers get their day-to-day needs met.