DoorDash is bringing DashMart stores to Long Island

DoorDash is betting that Long Islanders want more convenience — and are willing to pay for it.

The food delivery company, which has several DashMart convenience stores in New York state, plans to expand the concept in the state, including West Babylon and Huntington on Long Island.

The San Francisco-based company in 2020 launched DashMart stores, from which customers can order groceries, household goods and restaurant items on an app and then receive their purchases by delivery or by going to the stores to pick up the goods directly.

“They’re looking for the customer who strictly wants a quick-turn solution to convenient shopping” and who is willing to pay a premium for it, said Jim Sanderson, a restaurant equity analyst at Northcoast Research, an equity research firm in Cleveland.

The DashMart planned for West Babylon will open at 51 Eads St. in early June, a DoorDash Inc. spokeswoman said.

An application for interior alterations to an 8,000-square-foot building was submitted to the town of Babylon on Oct. 7 and a building permit was issued Jan. 5, town spokesman Kevin Bonner said.

The Huntington store is expected to open at 6133 Jericho Tpke. in the third quarter of this year, the DoorDash spokeswoman said. 

The property owner, Commack Cubes LLC, submitted an application to the town April 7 for interior alterations to a 10,928-square-foot “storage facility,” said Lauren Lembo, Huntington spokeswoman.

DashMart stores each sell an average of 2,000 convenience, grocery, and restaurant items, from fresh and frozen food to household cleaning products to “ready-made restaurant meals and packaged spices and rubs from local merchants,” the company said.

DashMart customers make purchases on the DoorDash app under the “convenience” tab. But they can’t walk around in DashMarts shopping as they normally would in traditional convenience stores.

Instead, customers who choose to pick up their items instead of using delivery will retrieve their purchases from dedicated pickup areas or windows at the stores.

Planning to grow

There are now more than 25 DashMarts in the nation. DoorDash declined to disclose its expansion plans beyond the stores slated for West Babylon and Huntington or to disclose the locations of its open stores other than to say there are "several DashMart locations in New York state, including in New York City, Buffalo, and Syracuse."

But applications submitted to the New York State Liquor Authority show that 14 DashMarts exist or are planned in the state.

DoorDash applied to the liquor authority in March and May for grocery beer/wine products licenses, which would allow DashMarts to sell beer and cider  at 14 addresses in New York City and Suffolk, Westchester, Onondaga, Erie and Monroe counties. 

The applications are pending. 

Founded in 2013 as a restaurant delivery app, DoorDash got into the convenience business somewhat in April 2020 when it announced that it had added 1,800 convenience stores, such as 7-Eleven and Circle K, to its app to sell products that would be delivered by DoorDash’s independent drivers.

Then in August 2020, DoorDash began selling products from its DashMarts in eight cities. 

“The difference economically is they’re going to take the risk of building the inventory. They’re going to have to resell it … so they can decide to resell it [at a premium],” Sanderson said.

DoorDash is betting on customers being willing to pay more for convenience at DashMart stores — a 20% to 30% markup on the products, in addition to delivery fees and a 15% customer service fee, he said.

In fall 2021, Northcoast Research did price comparisons of orders of six high-turn items, including Coke, eggs, milk and Cheerios, purchased online in Chicago, Sanderson said.

The DashMart order was the most expensive, $29.45, following by Gopuff’s, $27.45, and Walmart’s, $18.77, he said.

DoorDash disputes Sanderson’s assertion about the product markups, according to the company spokeswoman, who declined to disclose how much the markup is. 

DoorDash offers “affordable, comparable pricing" on products at DashMart, she said. Restaurants and independently owned merchants set their own prices for products sold on the app, the spokeswoman said.

The company will continue to deliver for other retailers despite the growing number of DashMarts, she said.

By Tory N. Parrish

tory.parrish@newsday.comToryParrish1

Tory N. Parrish covers retail and small business for Newsday. She has worked at the Pittsburgh Tribune-Review and Observer-Dispatch in Utica, N.Y.