The news: Grubhub is partnering with Instacart to add grocery ordering as the Wonder Group-owned platform seeks to better compete with delivery rivals DoorDash and Uber.

• Groceries currently account for only a low single-digit share of Grubhub orders, CEO Howard Migdal told Bloomberg. Under the deal, Instacart will exclusively power Grubhub’s grocery shopping experience, replacing any previous grocer partnerships.
• The partnership—which marks the first time Instacart is embedding its grocery shopping experience within a third-party platform—allows Grubhub customers to shop from Instacart’s network of 1,000-plus retailers directly through Grubhub’s app or website. The collaboration is also set to expand to select pharmacies in the coming months.
• Although the experience remains hosted on Grubhub’s platform, Instacart shoppers will manage fulfillment and delivery. The service is rolling out to some users now and will be available nationwide by month’s end.

Growing competition: Although Instacart remains the largest grocery intermediary, holding 67.7% of the market, its share has steadily declined in recent years. We expect that trend to continue through 2027 as DoorDash, which dominates the US app-based food delivery market, and other rivals form new partnerships that intensify competitive pressure.

• DoorDash, which we estimate will capture 14.9% of grocery intermediary sales this year, this month expanded its partnership with Kroger to offer delivery from all 2,700 US stores. The companies are also collaborating on retail media strategies, brand insights, and new delivery models that leverage Kroger’s store network alongside DoorDash’s technology. The end of Instacart’s exclusive relationship with Kroger, its third-largest customer—behind only Publix and Costco—to DoorDash marked a major setback.
• Other competitors also aren’t standing still. Uber, expected to hold an 11.5% share, teamed with fast-growing Aldi to let Uber Eats customers order from 2,500 stores nationwide, as well as from Dollar Tree, Best Buy, and Sephora. Meanwhile, Amazon expanded its grocery reach in Florida through a new partnership with Winn-Dixie, making the regional grocer’s products available for delivery via Amazon.

In response to rising pressure from DoorDash, Instacart and Uber last year joined forces. The partnership allows Instacart customers to order restaurant delivery via Uber Eats through a dedicated tab in the Instacart app. The deal aimed to broaden Instacart’s appeal and advance its push to become an all-in-one delivery platform, while giving Uber Eats access to new customers. Since the partnership was struck, Instacart has seen its takeout users order groceries more frequently and spend more overall.

The Grubhub partnership pursues a similar goal: helping Instacart drive incremental sales through Grubhub’s urban, suburban, and college campus users. The company told Bloomberg it plans to strike additional partnerships over the next six to 12 months.

Our take: Beyond driving order growth, the partnership also opens new opportunities for both companies’ advertising businesses.

• Instacart is turning to partnerships to spark growth and hold its ground against DoorDash. By bringing its grocery service to other delivery apps, it aims to boost order volume and create additional ad revenue streams by helping brands reach new audiences in fresh contexts.
• Grubhub, meanwhile, is using grocery expansion to broaden its advertiser base. By adding grocery and pharmacy orders, the platform aims to attract more CPG and retail partners looking to reach high-intent shoppers.