Uber Eats Piloting On-Demand Grocery Delivery

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In the U.S. food delivery landscape, there's been one big eater. DoorDash has dominated the category among third-party delivery apps, growing its market share aong the big three food delivery platforms — Uber Eats, DoorDash and Grubhub — to a staggering 57%.

In the grocery delivery space, though, it's anybody's war to win.

Instacart has long reigned supreme in grocery. It's held greater than a 60% share in the market for online grocery pickup and delivery spend since April 2020, according to Edison Trends. But while Instacart saw 6% growth in online grocery pickup and delivery spend between July 2020 and July 2021, third-party delivery apps saw a 221% jump.

As food delivery platforms continue to break into grocery delivery, Uber Eats UBER is the latest to make a move. The platform on Thursday announced the launch of an on-demand and scheduled grocery delivery pilot in partnership with Grocery Outlet Holding Co. GO, adding to its growing presence in the grocery delivery arena.

The pilot rolled out Thursday across 72 Grocery Outlet stores in California, Oregon and Washington. Those include locations in Seattle, Portland, San Francisco, Sacramento and Palo Alto.

"Our goal is to provide a reliable and affordable grocery delivery option that works for everyone, no matter your budget," said Oskar Hjertonsson, head of grocery at Uber. "We see our partnership with Grocery Outlet as an opportunity to do just that by delivering customers the brands they like at the Grocery Outlet prices they love, on demand, right to their door."

Uber Eats introduced a grocery delivery service in the U.S. in July 2020. About a year later, it partnered with nationwide grocer Albertsons ACI to expand its grocery delivery offering to 400 U.S. cities, and in May, that partnership grew to include more than 2,000 Albertsons stores, which include brands like Acme, Safeway and Jewel-Osco.

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Much like the larger company, Uber Eats and Uber's delivery segment took awhile to turn a profit. But ever since CEO Dara Khosrowshahi's bullish comments about the growth of Uber delivery in December, it's been on a tear. 

Uber delivery's first profitable quarter came just a few months ago in Q4 2021, which ended this past January. But the company followed it up with a strong Q1 2022 performance that saw the segment reach all-time highs in both gross bookings and active merchants. 

In addition, monthly active platform customers, basket size, order frequency and total active couriers all saw year-over-year growth. Adjusted earnings before interest, taxes, depreciation and amortization came in at $30 million, building on Q4 2021's profitability milestone.

Uber Eats competitor DoorDash DASH has also been making inroads into grocery delivery, launching its own grocery delivery partnership with Albertsons in February and debuting an ultrafast grocery delivery offering in December. Grubhub JTKWY also piloted an ultrafast service in February. That same month, it took its convenience channel, Grubhub Goods, nationwide.

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This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.