DoorDash Bets on Choice Against Amazon's Grocery Push

Amazon is significantly increasing its grocery delivery operations, particularly for perishable items, expanding same- and next-day services to numerous US locations. This move intensifies competition with rivals like DoorDash and Instacart, whose stocks saw a notable decline following the announcement.

Despite Amazon's expansive strategy, DoorDash CEO Tony Xu emphasized the company's distinct advantage: customer choice. Unlike Amazon, which relies on its own brands and Whole Foods, DoorDash collaborates with established grocery chains, including recent expansions with Kroger and new partnerships with regional players.

Xu highlighted that consumers often shop at multiple stores to find specific items, a preference DoorDash caters to. He expects continued strong demand for DoorDash's services due to this emphasis on variety. The company is also enhancing its retail services, such as DashMarts, to empower grocers to better compete with Amazon.

DoorDash's financial outlook shows promise, with the retail and grocery segment projected to achieve unit-economic positivity in the latter half of 2026. This development comes as DoorDash's gig workers increasingly handle grocery deliveries, which can be more financially viable than restaurant orders, attracting larger grocery purchases beyond simple fill-in trips.