Could Groceries Be DoorDash's Next Big Profit Engine?
Key Points
DoorDash dominates the U.S. restaurant delivery business, and now it's gunning for grocery and retail delivery as well.
The company is gaining market share, and the unit economics should turn positive later this year.
Success in grocery delivery could accelerate DoorDash's growth, but competition is intense.
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Restaurant delivery giant DoorDash (NASDAQ: DASH) missed analyst expectations with its fourth-quarter report on Wednesday, but growth is accelerating. The number of orders rose 32% year over year to 903 million, marketplace gross order value soared 39% to $29.7 billion, and net income jumped 51%.
While the core restaurant delivery business is performing well, DoorDash is on the cusp of turning a profit in its grocery and retail delivery business. The company has been diversifying into new delivery types, absorbing losses as it gains ground in a highly competitive market. With an inflection point coming, non-restaurant delivery could be a major growth driver for DoorDash in the years ahead.
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Profitable by the end of the year
DoorDash said in its fourth-quarter report that it expects unit economics for its grocery and retail business to turn positive in the second half of the year. Grocery orders are more complex than restaurant orders, but the company is moving closer to making the business contribute to the bottom line rather than detract from it.
DoorDash CEO Tony Xu said during the earnings call that roughly 30% of customers are now ordering outside of the restaurant category. In a separate press release on Wednesday, the company disclosed that it had become the top third-party marketplace by order volume in the U.S. for grocery and retail, according to data from YipitData. In 2025, DoorDash partnered with Kroger, Family Dollar, and 33 additional grocery partners, greatly expanding its reach.
The goal, according to CFO Ravi Inukonda, is to get 100% of customers ordering outside of the restaurant category. The biggest obstacle is Instacart, owned by Maplebear, but DoorDash is making steady progress in chipping away at that company's lead. According to Wedbush, Instacart's grocery delivery market share dropped to 58% in 2024 from 70% the year before.
The shift from losses to profits in the grocery and retail business is the result of many small things moving the numbers in the right direction. Basket sizes are getting bigger, and customers who have been on the platform for longer are ordering more frequently. On DoorDash's end, it's all about efficiency. "There's no one thing which is a step function change. It's continual execution, finding basis points, largely how we operate our entire business," said Inukonda.
Another growth engine for DoorDash
With DoorDash nearing profitability in its grocery and retail delivery, the company is proving that the business can work at scale. Restaurant delivery is still the core business, but success stealing market share in grocery delivery can help accelerate revenue growth over the next few years.
The grocery business is highly competitive, and Amazon recently expanded its same-day grocery delivery service to more than 2,300 cities. Time will tell how competitive pressure will impact DoorDash's business, but for now, grocery and retail delivery represent a major long-term growth opportunity.
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Timothy Green has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and DoorDash. The Motley Fool recommends Instacart. The Motley Fool has a disclosure policy.
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