Dive Brief:

• Wegmans has partnered with DoorDash to roll out its Wegmans Meals 2GO food delivery service to 40 stores by the end of 2019, the grocer announced in a press release.
• Through the Wegmans Meals 2GO app, shoppers can order from Wegmans’ prepared foods selection, which includes sushi, pizza, wings, subs, salads, soups, items from the hot wokery, heat-and-eat meals, desserts and beverages. Delivery is available within a five-mile radius for orders of $20 or more, or customers can opt for carry-out or curbside pickup.
• Wegmans Meals 2GO is currently available at one location in Sterling, Virginia and two stores in Rochester, New York. Two additional Rochester stores will go live on Tuesday. Customers must download the Wegmans Meals 2GO app in order to access the service.

Dive Insight:

Today’s announcement indicates the conclusion of a successful pilot for Wegmans Meals 2GO, which the grocer launched last October at its Pittsford, New York store in concert with Instacart. Since then, Wegmans says it has refined the service using shopper feedback. 

"During the year-long pilot at our Pittsford store, we listened and learned, fine-tuned the app, and created a menu that had something for everyone at home or at work," said Erica Tickle, Wegmans e-commerce group manager, in a statement.

Wegmans didn't say why it switched from Instacart to DoorDash, though the move likely had something to do with the latter's expertise and leading position in meal delivery. The restaurant delivery service recently took the lead in market share with 27.6%, overtaking Grubhub, and has grown quickly in the past year, delivering two times the amount of orders in 2018 than in the previous four years of operations. Wegmans still uses Instacart for grocery delivery.

More Americans are demanding meal delivery as an alternative to cooking at home or dining at expensive restaurants. As delivery options increase through apps like DoorDash expand and more restaurants get on board, grocers must weigh how and if they might incorporate meal delivery into their e-commerce offerings. Most grocers don't offer a standalone meal delivery service — and many may not have the high demand and quality to do so, as Wegmans does. 

Wegmans’ partnership with DoorDash further blurs the lines between restaurants and grocery stores. Restaurant brands continue to launch locations in grocery stores, and grocers' prepared food offerings are becoming more reflective of restaurant quality and variety. 

While consumers are flocking to restaurant and grocery delivery, grocers and restaurants — with their slim margins — are less enthusiastic. The Wall Street Journal recently reported that food delivery is an expensive but necessary offering for the companies, which usually lose money with each delivery made.  According to a survey from online ordering platform Tillster, 85% of consumers are unwilling to pay more than $5 for food delivery — so companies have to remain competitive with their pricing. Wegmans Meals 2GO will run customers about $4.99 per delivery, and DoorDash fees for other restaurants typically range from 99 cents up to $6.99.