As consumers increasingly expect to get their food needs met on demand, the convenience retail industry is right there, offering some of the benefits of purchasing both from a restaurant and from a grocery store.
The industry is gaining share from each of the two, restaurant and grocery, with many convenience stores selling prepared meals at lower prices than the average restaurant and selling basic food and beverage essentials (milk, bread, etc.) that can be bought in the same purchase.
The digital convenience store space is comprised of both brick-and-mortar incumbents and digitally native newcomers. For the former, take Casey’s General Stores, the United States’ third-largest convenience store retailer and fifth-largest pizza chain, which operates more than 2,400 locations. As of an interview with PYMNTS about a year ago, the chain had 900 stores on DoorDash’s marketplace; 800 to 850 using DoorDash’s white-label fulfillment platform on Casey’s-branded platforms; 750 on Uber Eats; and 400 to 450 stores where delivery is fulfilled in-house.
“When you do it yourself, you obviously have to work on, ‘How do we optimize this?’” Art Sebastian, vice president of digital experiences at Casey’s General Stores, told PYMNTS at the time. “‘How do we ensure we have the right amount of drivers that meet the needs for orders, but we don’t have extra drivers standing around?’ So, plenty of work there.”
By delivering both prepared food such as pizza and basic groceries such as sugar, the retailer can offer consumers the option to get in one purchase what they might otherwise have had to buy from one of each, a restaurant and a grocery store, paying the fees for each delivery purchase.
Digitally-native competitors offer similar benefits. Take, for instance, Gopuff, which delivers across the U.S. and U.K., offering prepared food such as pizza and burgers, a limited selection of produce, pantry staples, alcohol and more.
Following the footsteps of Gopuff, which was founded in 2013, the United States’ leading restaurant aggregator DoorDash launched its own digital convenience store, DashMart, in 2020. Earlier this summer, Instacart and Walmart teamed up on a digital convenience store in Canada, Instacart Now, and back in February, Grubhub launched its own DashMart competitor, Grubhub Goods.
“Diners have come to expect more choices when they land on Grubhub, including convenience options, which we see as a natural extension of our marketplace and a way to bring more value to the entire Grubhub ecosystem,” Grubhub Director of Growth and New Verticals Kyle Goings said in a statement at the time.
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