By Hilary Russ
NEW YORK (Reuters) - DoorDash Inc, the largest U.S. third-party delivery company for restaurants, on Thursday launched a new grocery service, entering an increasingly crowded market dominated by Instacart Inc and Amazon.com Inc's (O:AMZN) Amazon Fresh.
Grocery delivery on DoorDash's app will begin with Meijer Inc, among others, and expand to more regional and specialty chains in coming weeks, DoorDash's head of "new verticals" Faud Hannon told Reuters.
The more than $680 billion U.S. grocery industry has seen sales rise as the coronavirus pandemic prompted people to stay home and cook more, and to shun shopping themselves in favor of lower-contact delivery services.
DoorDash grocery orders are fulfilled inside of supermarkets by employees of Swiss staffing agency Adecco Group AG (S:ADEN), who then put orders on a pick-up shelf for DoorDash drivers to deliver. DoorDash pays Adecco a fee based on an hourly rate for the number of Adecco employees that DoorDash requests in any given store. While DoorDash drivers are independent contractors, Adecco workers are Adecco employees with benefits.
DoorDash said it will deliver flour, tomatoes and olive oil in real time just as it does for lunch orders from restaurants.
Earlier this year, it launched delivery of general merchandise with 7-Eleven Inc, Circle K (TO:ATDb), Wawa Inc, Walgreens and CVS Pharmacy (N:CVS). Some of these stores also use other third-party delivery companies.
In some areas, DoorDash also delivers goods - including food - for Walmart (N:WMT), though customers must still place orders on Walmart's app, not through DoorDash. DoorDash is in 4,000 cities in the U.S., Canada and Australia.
The new service will be included for members of DashPass, the company's subscription product.
Non-subscribers will pay delivery fees starting at $3.99. Grocery stores will also pay a percentage of sales to DoorDash to cover delivery costs.