Waitr has long been in the shadows of giants.
The forgotten sibling of Uber Eats, DoorDash and Grubhub was born in Lake Charles, Louisiana, in 2013 before spreading quickly across the American South. But with less than a 1% share of the U.S. food delivery market today, Waitr (NASDAQ: WTRH) is looking to ditch restaurant deliveries in favor of non-restaurant verticals — like convenience stores.
This week, Waitr announced that it would be delivering items from over 700 7-Eleven stores across the country. It’s the first national convenience store Waitr has added to its merchant catalog.
Per the agreement, Waitr will deliver items for 7-Eleven along with Bite Squad and Delivery Dudes, two food delivery startups that Waitr acquired for just over $320 million in 2018 and about $23 million in 2021, respectively.
“The addition of 7-Eleven to our platform represents the newest example of our ongoing commitment to expand into new delivery verticals,” said Carl Grimstad, Waitr CEO and chairman of the board. “This partnership creates a new level of convenience for our customers. Effective immediately, we will be able to deliver your favorite food and snacks from hundreds of 7-Eleven locations directly to you.”
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Waitr operates in over 1,000 U.S. cities, including the 90-plus it added to its platform in 2021. The app boasts more than 26,000 participating merchants, but the vast majority of them are restaurants.
To reinforce its shift away from restaurants, Waitr plans to rebrand as ASAP later this year. Grimstad told Restaurant Dive that the company would be targeting cannabis delivery in particular as it looks to compete with the big three food delivery apps outside of their core verticals.
“We are going to have to be more than just the fourth player in food delivery in the U.S.,” Grimstad said. “We had to change the narrative.”
A complex array of regulatory frameworks that vary by state, county and even municipality govern the cannabis delivery space. But the Waitr CEO still sees it as an attractive play. Grimstad compared the nascent cannabis delivery industry to the early days of food delivery, when platforms suffered from underdeveloped technology and payment processing issues.
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“We … continue to see those similarities in the cannabis vertical. So think of it just like any other retail environment, right? You need a payment solution,” he said.
Grimstad has already put his money where his mouth is. Last August, Waitr acquired a trio of e-commerce payment processing companies, ProMerchant, Cape Cod Merchant Services and Flow Payments, which builds marketplace, delivery and payment solutions for cannabis dispensaries. It also bought cannabis-focused point of sale platform Cova in December.
The philosophy at Waitr is not to bite off more than it can chew. Not only will the company move away from restaurants — it will also keep its distance from ghost kitchens and virtual brands, like those on platforms such as DoorDash (NYSE: DASH). Instead, it will continue to provide delivery services and payment processing software to its merchant partners.
Still, it’s taken a few pages out of the big three’s playbook. In 2019, Waitr laid off all of its 2,300 drivers, swapping hourly pay for the independent contractor model used by delivery apps like Uber Eats (NYSE: UBER). But that’s where the similarities end — at least in Grimstad’s eyes.
“Our whole pitch is we’re not going to open ghost kitchens,” he said. “We’re not going to open our own pizza or chicken wings business. We’re going to be your solution, Mr. Merchant. … It has to be really more of a merchant services solution rather than just food delivery.”
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