Food delivery company DoorDash (DASH) and Kroger (KR), the second-largest grocery chain in the U.S., are expanding their partnership to give customers full access to Kroger’s grocery selection directly through the DoorDash app. Starting October 1, the two companies will use Kroger’s delivery network to bring on-demand groceries to even more households. Unsurprisingly, DoorDash COO Prabir Adarkar called the partnership a major step forward in offering shoppers more convenience, value, and options when buying groceries.
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With this expansion, DoorDash users can now shop from all of Kroger’s family of stores without switching apps. The two companies also plan to work together on new delivery models and advertising opportunities, which could help both brands grow. This move improves DoorDash’s position in the grocery delivery space, as demand for fast and flexible grocery service continues to grow.
Interestingly, the partnership is a big blow to Instacart (CART), which had Kroger as its third-largest customer after Publix and Costco (COST). Instacart is already facing strong competition from Amazon (AMZN) and Walmart (WMT), both of which are ramping up their delivery services. Indeed, Instacart stock has fallen from above $51 per share in August to below $40 now due to these factors.
Is DASH Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DASH stock based on 22 Buys, eight Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average DASH price target of $304.19 per share implies 12.9% upside potential.
