DoorDash announced a partnership Thursday with Walgreens Boots Alliance to deliver over-the-counter medication and other products from the drugstore chain.
The service is launching in the Chicago, Atlanta and Denver areas, with plans to expand to other markets throughout the summer, according to a news release. More than 2,300 products from the store are available for delivery.
DoorDash and CVS Health teamed up for a similar collaboration last month as the on-demand delivery start-up continues to widen its offerings outside of restaurants. In an interview Thursday on CNBC’s “Squawk Alley,” DoorDash COO Christopher Payne said the strategy has been influenced by the economic disruption of the coronavirus pandemic.
“One of the things we did in Covid is we shifted into going beyond restaurants and focused on empowering local economies by bringing other things that people want to be delivered to their home, and Walgreens is a perfect example of that,” Payne said.
The number of Walgreens’ products available on DoorDash will “rapidly grow … to 5,000 items to essentially bring the entire Walgreens store to your door on demand,” Payne said.
The Walgreens collaboration will enter markets such as Cleveland, Minneapolis and Phoenix by the end of summer, according to DoorDash’s release.
The increasingly crowded third-party food delivery landscape has been shaken up by two recent moves as companies try to grow market share and reach profitability. GrubHub merged with European rival Just Eat Takeaway.com in early June. And this month Uber, following its previous talks to acquire GrubHub, bought out Postmates.
DoorDash, recently valued at $16 billion, had the largest share of the U.S. food delivery market in June at about 45%, according to a recent report from data analytics Second Measure. Uber was second at 24%, followed by GrubHub at 22%. Postmates was fourth with 8%, according to Second Measure.
DoorDash’s entrance into convenience store delivery also means it is maybe competing more directly with the likes of Amazon and Instacart. But Payne said the delivery market in general has always been competitive and stressed DoorDash’s emphasis is on its own business plan.
“That’s one of the key reasons I believe we have a market share lead in food delivery in the United States,” he said. “The idea is we want to connect every local business to every local consumer, and that’s a very different strategy than just broad e-commerce.”
Shares of Walgreens were up nearly 1.5% on Thursday. The stock has fallen 30% year to date.