Kroger and DoorDash Expand Grocery Delivery Partnership

Kroger and DoorDash Forge Expanded Grocery Delivery Alliance

Kroger Co. and DoorDash Inc. have announced a substantial expansion of their grocery delivery partnership, a move set to reshape the competitive landscape of the online grocery market. Beginning October 1, 2025, DoorDash will facilitate the delivery of Kroger’s full grocery assortment, including fresh foods and household staples, from nearly 2,700 of its stores across the United States. This significant development marks a strategic evolution for both entities within the rapidly growing retail sector.

Detailing the Expanded Partnership

This expanded collaboration moves beyond previous limited offerings of items like sushi and prepared meals, now encompassing Kroger’s comprehensive product range. Customers will be able to access the full Kroger catalog directly through the DoorDash app, integrating existing deals, affordability features, and loyalty program discounts. The partnership extends across key Kroger banners, including Mariano's, Fred Meyer, Ralphs, and Harris Teeter. Beyond direct delivery services, the companies have also committed to joint innovation, particularly in areas such as retail media and the development of new delivery models. This signals a deeper strategic alignment aimed at leveraging Kroger's first-party shopper data with DoorDash's delivery insights to enhance advertising capabilities for Consumer Packaged Goods (CPG) brands.

Market Reaction and Financial Implications

The announcement generated notable movements within the market, particularly impacting companies in the food and grocery delivery sector. For DoorDash (DASH), the expansion is anticipated to positively influence its financial performance. The inclusion of Kroger’s extensive grocery selection is expected to drive a significant increase in Gross Order Volume (GOV), building on previous projections of $24.2-$24.7 billion for 3Q25. Furthermore, improved adjusted EBITDA margins are anticipated, continuing a trend observed in 2Q25 where adjusted EBITDA as a percentage of Marketplace GOV rose from 2.2% to 2.7% year-over-year.

Conversely, shares of grocery-delivery competitor Instacart (CART) experienced a sharp decline following the news, falling approximately 7-8% in afternoon trading on the day of the announcement. This reaction reflects investor concerns regarding heightened competition. Kroger represents a significant partner for Instacart, accounting for over 10% of its gross transaction value (GTV), making the expanded DoorDash partnership a direct challenge to Instacart’s market position.

Broader Context and Industry Implications

This expanded alliance underscores a broader strategic shift within the online grocery delivery market. For Kroger, it represents a capital-efficient growth strategy, leveraging existing store infrastructure to expand digital touchpoints and attract new households. For DoorDash, the move strengthens its position in grocery delivery, diversifying beyond its traditional restaurant delivery core and aiming to capture a larger share of the burgeoning grocery market. Over 25% of DoorDash’s global monthly active users ordered from new verticals, including grocery, in Q2 2025, highlighting the segment's growing importance.

The intensified competition is particularly challenging for pure-play aggregators like Instacart. Wedbush analysts commented that DoorDash’s extended partnership with Kroger "directly challenges Instacart's position among intermediaries." The online grocery delivery services market is projected for substantial growth, forecasted to expand by USD 1.18 trillion from 2024 to 2029, accelerating at a Compound Annual Growth Rate (CAGR) of 23.1%. This competitive environment suggests a potential re-evaluation of business models, favoring integrated logistics and deeper direct partnerships with major retailers.

Outlook: Evolving Landscape of Online Grocery

The expanded Kroger-DoorDash partnership sets a precedent for how major retailers and delivery platforms may collaborate in the future. Key factors to watch in the coming months include the operational rollout of the full grocery assortment across nearly 2,700 stores and the effectiveness of the planned innovations in retail media and new delivery models. The response from competitors, particularly Instacart and other major players like Amazon and Walmart who are also aggressively expanding their grocery delivery services, will be critical. This collaboration highlights the increasing importance of strategic alliances and technological integration as companies vie for market share in the rapidly expanding and highly competitive online grocery ecosystem.