DoorDash is reportedly ending its delivery partnership with Walmart
A source close to the matter said DoorDash is making its move to "focus on its long-term customer partnerships."
The source said DoorDash sent Walmart a letter to terminate the partnership earlier this month.
Walmart said its continuing to grow out its Spark network, which accounts for the majority of Walmart deliveries.
DoorDash is ending its partnership with Walmart after more than four years of delivering the retail giant’s products to customers, according to a new report from Business Insider. Sources familiar with the matter told Insider that DoorDash decided to end its partnership with Walmart because it was no longer mutually beneficial and because the delivery company wanted to focus on “its long-term customer relationships.”
A spokesperson for Walmart told Insider that the two companies “have agreed to part ways.”
DoorDash is said to have sent Walmart a 30-day notice and a letter earlier this month to end their partnership. The termination will go into effect in September.
The termination will end a partnership that began in April 2018 as a pilot to deliver Walmart groceries to customers in the Atlanta metro area. Since then, the partnership expanded to states across the country.
Although Walmart has partnered with third-party delivery services like DoorDash, the retail giant has also been focused on building out its own delivery efforts. For instance, Insider reported on Thursday that Walmart is acquiring Delivery Drivers, which is the company behind Walmart’s Spark platform that sees gig workers deliver orders to customers. A Walmart spokesperson told Insider that the Spark platform has grown to become the company’s largest delivery service provider and that it accounts for 75% of Walmart deliveries and serves 84% of US households.
As the largest grocery chain in the country, Walmart has dominated grocery deliveries. As of June 2021, the retail giant controlled 48% of all grocery delivery sales, slightly ahead of Instacart's 45%, according to FreightWaves.
DoorDash, on the other hand, has been building out its DoorDash Drive platform, its business-to-business service that provides drivers to merchants through their own website or app.
According to a letter to shareholders from earlier this year, active stores on DoorDash Drive and the related Storefront product increased 70% year-over-year in the last quarter of 2021.
While DoorDash’s partnership with Walmart is coming to a close, the company has geared up to collaborate with another notable brand, Facebook parent Meta. DoorDash confirmed earlier this week that DoorDash Drive is now in the early stages of testing a service that will allow DoorDash drivers to pick up and drop off Facebook Marketplace items to customers. DoorDash and Meta are currently offering the test service in several cities in the United States.
Beyond restaurants like Chipotle, DoorDash Drive serves a diverse array of merchants, including beauty retailers like Sephora, software providers like Toast, and consumer-to-consumer marketplaces like Meta. Walmart has been one of the biggest names to partner with DoorDash.
It’s worth noting that DoorDash has also been testing a package return feature since March that allows customers to return items to the post office, UPS or FedEx.
