DoorDash (NYSE:DASH) still sees itself as a growth story even as the U.S. economy has hit some trouble spots and competition remains intense.
DoorDash CEO Tony Xu highlighted the substantial opportunity for expansion in the grocery delivery market during a talk at the recent Groceryshop conference in Las Vegas, according to Evercore ISI's rundown of the event.
As a general strategy, DoorDash (DASH) wants to press its scale advantage on the density front with 3M drivers giving it the lowest cost per last mile.
"In order to make the profit equation work, the key is adding even more density to fully utilize drivers when it comes to last mile economics," noted Evercore analyst Michael Montani.
While DoorDash (DASH) has more than doubled its grocery customers in the last year alone, order/demand density is said to remain a preventative hurdle towards broader geographic expansion due to limited driver quantities in rural locations. That means that partnerships with retailers like Albertsons, Giant Eagle, and Raley's are crucial.
DoorDash (DASH) is looking to grab the extra grocery market share even as consumers themselves are stretching their food and beverage dollars even more.
Shares of DASH fell 1.38% in mid-day trading on Monday. The online food delivery stock trades more than 20% below its 50-day and 100-day moving averages.