While Maplebear, the parent of Instacart, inches toward an initial public offering, one of the company’s primary rivals raised some broad questions this past week about the grocery-delivery experience for consumers.
Speaking at the
Goldman Sachs
technology conference in San Francisco,
DoorDash
CEO Tony Xu argued that while there is a big “underpenetrated” opportunity in groceries, consumers view the experience as “worse than the physical experience of buying your own” goods at the store.
While best known for delivering restaurant food, DoorDash, which is working with current grocery delivery services, offers several ways to get grocery via online ordering.
“All of us have to find product-market fit to get the mass market of consumers to substitute or replace their offline shopping experience,” Xu said, without referring to Instacart or other competitors directly.
“People have been working this since the 1970s, and there is still a long ways to go,” he said. The solution starts with getting the basics right, like making sure buyers get exactly what they ordered. “Today, you pay a premium and won’t always get what you ordered,” he said. “That’s where the status quo is. We have a lot of work to do…there has to be something better.” Delivery services need to provide consumers with “prices they expect to pay, in a manner and time more convenient than if they did it on their own.”
Simple, if challenging.
Last Week
Markets
China’s Country Garden made two debt payments to overseas investors to avoid default. Oil prices rose after Russia and Saudi Arabia extended output cuts. In the U.S., Goldman Sachs cut the probability of recession to 15%, while
Morgan Stanley
warned that traders were too optimistic. Stocks rose, then fell on inflation fears and concerns over China curbs on
Apple
iPhones. On the week, the Dow industrials fell 0.75%, the S&P 500 was off 1.29%, and the Nasdaq Composite slipped 1.93%.
Companies
Blackstone and
Airbnb
will join the S&P 500, replacing Lincoln National and
Newell Brands.
Novo Nordisk
edged out
LVMH Moët Hennessy Louis Vuitton
as Europe’s most valuable company. The Wall Street Journal reported that the Federal Trade Commission plans to file a lawsuit against
Amazon.com
this month.
Deals
SoftBank chip designer Arm Holdings filed for its IPO in the U.S., hoping to raise $4.9 billion for a $52 billion valuation. Arm also announced a deal with Apple beyond 2040…The Austrian owner of beauty products retailer
L’Occitane International
dropped plans for a buyout…Lithium producer
Albemarle
agreed to buy Australia’s
Liontown Resources
for $4.3 billion…. Saudi Telecom amassed a 9.9% share in Spanish telecom Telefónica…
Dominion Energy
said it would sell several natural-gas distribution companies to
Enbridge
for $9.4 billion…Two global packaging companies, WestRock and
Smurfit Kappa,
are in talks on a $20 billion merger.
Next Week
Monday 9/11
Two megacap software companies release quarterly results.
Oracle
reports after the closing bell on Monday, and
Adobe
follows suit on Thursday.
Wednesday 9/13
The Bureau of Labor Statistics releases the consumer price index for August. Economists forecast a 3.6% year-over-year increase, four-tenths of a percentage point more than in July. The core CPI, which excludes volatile food and energy prices, is expected to rise 4.4% following a 4.7% gain previously. The CPI is nearly six percentage points lower than its peak of 9.1% reached in June of 2022.
Thursday 9/14
The European Central Bank announces its monetary-policy decision. Traders are pricing in a one in three chance that the central bank will raise its key short-term interest rate by a quarter of a percentage point to 4%. The ECB has increased the target rate from negative 0.5% to 3.75% in a little more than a year.
The current contract between the United Auto Workers and the Big Three auto makers expires at 11:59 p.m. The UAW has authorized a strike if no contract is agreed upon by the deadline. The current contract covers nearly 150,000 workers, and as of press time, the parties seem far apart.
Write to Eric J. Savitz at [email protected]
Read the full article here