To bring grocery delivery to more customers, two grocers are expanding their partnerships with Instacart. Kroger and German discount grocer ALDI are rolling out the platform to more of their brick-and-mortar stores.
In 2014, Amazon’s Whole Foods became Instacart’s first national partner. But, following Amazon’s acquisition of Whole Foods, Amazon started offering its own two-hour delivery from stores in Austin, Cincinnati, Dallas and Virginia Beach in February. In March, it rolled out the service to Atlanta and San Francisco. As a result, the future of Amazon and Instacart’s partnership is in question, as some are wondering if Amazon will buy out Instacart’s contract, Bloomberg reported.
For grocers, Amazon’s ventures into online groceries bring big competition, but delivery platforms such as Instacart can help grocers compete with the threat of eCommerce and delivery. Currently, Instacart delivers groceries for the eight biggest grocers in North America, such as Albertsons and Costco Wholesale Corp.
Now, Instacart will count ALDI stores in greater Chicago — in areas as far as Rockford, Illinois — as part of its platform. ALDI tested the service in three markets — Atlanta, Dallas, and Los Angeles — in August, Chain Store Age reported.
The news of both expanded partnerships comes as Kroger’s earnings last week raised analyst concerns over the Amazon Effect on Kroger and the grocery segment at large. This was evidenced by the drubbing its stock price took after Kroger CEO Rodney McMullen cautioned that future profits could soften.
McMullen said that further investments in tech as part of the Restock Kroger initiative announced last October would mean profits would take a hit. Those investments include everything from beefing up the retailer’s private label brands to being more price-competitive on individual grocery items to investing more into its online order, pick-up and delivery capabilities.