Dive Brief:

• Albertsons announced Monday it will offer delivery from nearly 2,000 stores in as little as an hour through DoorDash’s marketplace app.
• The grocer will also use DoorDash Drive, the delivery firm’s white label e-commerce platform, to power online shopping in select markets.
• The tie-up continues Albertsons push into third-party marketplaces as it pulls back on operating its own delivery fleets in certain areas.

Dive Insight:

Albertsons’ delivery alliance with DoorDash is part of the grocers’ ongoing journey to strike a profitable balance between third-party apps and its own delivery assets. 

Earlier this year, news emerged that Albertsons would discontinue using its own delivery fleets in markets like Southern California and Texas, and instead rely on popular companies like DoorDash and Instacart for last-mile fulfillment. Albertsons was early among major chains to build out its own delivery fleet at banners like Safeway — seemingly offering an advantage for the grocer as online orders swelled during the pandemic. Kroger, its close national competitor, launched its own delivery fleet this year, which is now making deliveries in Florida and Ohio.

But operating refrigerated trucks and staffing its own drivers is also very expensive, and Albertsons has decided in these select areas to bet on outsourcing and the prospect of enticing the millions of customers currently using third-party apps.

Under the new partnership, DoorDash will offer delivery of more than 40,000 products from Albertsons, with no minimum order size required. Shoppers who use DashPass, the company's membership service, get delivery fees waived on orders of $25 or more.

The two companies have also collaborated on an online game that seeks to draw young consumers into Albertsons ecosystem. “In the Bag” invites players to fill up a digital grocery bag with products before running out of space. DoorDash will rank players, with the top scorer in each tier entered for a chance to win $5,000 in DoorDash credits.

In addition, starting Monday and lasting through the end of June, DoorDash is also offering users up to $40 off their first Albertsons order through a 40%-off promotion.

Albertsons is now DoorDash’s largest grocery partner. The firm, which launched grocery delivery last year, delivers from grocers like Hy-Vee, Meijer and Farmstead. It also operates its own online convenience chain, DashMart, which operates more than 25 locations in the U.S.

After a fiscal year in which it recorded a 258% increase in digital sales, Albertsons is positioning itself for sustained long-term growth as rivals like Amazon, Walmart and Kroger also expand. The grocer offers pickup service from more than 1,400 locations and plans to integrate more automated micro-fulfillment centers to process online orders in population-dense markets.

Correction: A previous version of this story misidentified the number of DashMart locations in operation. There are currently more than 25 locations across the U.S.