Uber Eats is becoming a reliable platform for grocery delivery for consumers.
In the US, Uber Eats works with grocers like Albertsons, Sprouts, Costco, Home Depot, and Lowe’s. Last year, Uber struck up a partnership with its rival Instacart to drive more shoppers to Uber Eats. On its most recent earnings call, Uber CEO Dara Khosrowshahi said Instacart is boosting “suburban” demand for Uber Eats: “We do think that the incrementality of the volume from Instacart is quite strong.”
Uber’s food delivery service rolled out in 2014 as UberFresh was later rebranded to Uber Eats in 2015. Over the years, consumer appetite for grocery delivery has become table stakes. EMarketer reports that online grocery has become the second-highest sales category in US e-commerce.
In a recent chat with Retail Brew, Uber’s global VP for grocery and retail, Susan Anderson, said she will focus on making sure Uber Eats remains an affordable marketplace in these inflationary times. “The cheapest way of getting your groceries will always be to go to the store to shop yourself and drive it home yourself,” she said. “But for people who are time poor or needing things urgently, we need to make sure that [it] continues to be something that’s affordable and value for money.”
This interview has been lightly edited for length and clarity.
How crucial is Uber Eats for merchants?
Uber Eats is proving to be a great channel for merchants across both grocery and rest of retail to access new customer bases in order to get this on-demand use case. What Uber Eats is enabling, from a food side, what we’re seeing is customers use retail and grocery on Uber Eats to get access to fresh top-up food, small baskets, and helping them to eat fresh every day.
Our top-selling items are all fresh produce. We sell a lot of bananas, avocados, tomato—all of these pieces. And we see customers buying food for their children’s lunch boxes; they’re buying dinner for that evening. If they don’t necessarily want to go to a restaurant, they are buying the ingredients and being able to order that food. They’re also buying alcohol. They’re buying ice cream. They’re buying chocolates or the candy that kind of goes with that.
And we see it’s really incremental. So, for merchants, if they’re looking for incremental growth that complements a full-basket shop that they get with their customers directly, through their 1P websites, that we can help with that last mile delivery. They can also be on our marketplace and get access to on-demand and new customers in a use case and a time that they would not otherwise be able to get.
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Can you quantify that incrementality?
It’s very substantial. It’s high-double-digits incrementality, when we’ve looked at this. When we’re working with merchants, we’re able to use their loyalty programs in order to be able to track the customer behavior: what somebody is buying in store, what somebody is buying from merchants directly through their own website or their own digital channels, and what somebody’s buying through Uber Eats. And we can therefore show the different use cases in incrementality. And when we’ve done that work with merchants, we’re seeing very high-double-digit incrementality.
What is Uber’s strategy to tackle competition?
It’s about the power of the platform. So customers are using Uber both for its mobility uses as well as being able to get anything, whether that’s restaurant delivery as well as grocery. We see that our membership program is the only one that goes across both.
And then from a brand perspective, again, what Uber brings…is that ability to be able to not only have the brand advertising that converts directly—-for instance, a consumer goods product advertising in the app, being able to convert directly for an on-demand delivery—but also to be able to have brand campaigns running through our mobile app that can directly convert into the delivery app and then translate into sales.
What are you most focused on and most excited about for 2025 in this role?
We have a lot of penetration of our customers using grocery and retail, but we have a long way to go. There’s a lot of growth upside. We know, once customers try this, they come back and they use it time and time again.
And so for me, I’m really excited about having our consumers discover these new ways to access their favorite merchants and favorite retailers and understand that it’s possible for them to get items delivered to them within 30 minutes, enabling them to always eat fresh at a price that’s really affordable.