Grocers push back on DoorDash's Instacart deal
Small grocery store owners are expressing concern over the potential merger between DoorDash and Instacart. They fear that a consolidated delivery market will reduce their bargaining power and negatively impact their ability to negotiate favorable terms.
Why it matters
Market consolidation in the delivery sector could significantly alter the operational costs and profit margins for small, independent retailers.
A Stew Leonard's grocery store in Yonkers, New York Ted Shaffrey/AP DoorDash has said its deal for Instacart will help small businesses compete with larger ones. Some small grocers are skeptical about that. A larger DoorDash could be harder to negotiate with, they said. DoorDash says that its $17 billion deal for Instacart will "help local stores win." Some local stores aren't so sure. Many local grocery chains, some of which are family-owned, have inked delivery deals with DoorDash and Instacart over the past decade. The delivery services were particularly important to the smaller chains during the pandemic and after Amazon bought Whole Foods in 2017 — both events that sent them looking for a quick delivery option. Instead of giving them a shot at competing with Amazon and Walmart, though, some local grocers say the deal presents risks for them.
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