Instacart bowing out at grocery
Instacart is starting to “wind down” its relationship with Whole Foods, expecting to end it within months, the grocery-delivery service said Thursday in a blog post by founder and CEO Apoorva Mehta.
The move had been widely anticipated since Amazon paid $13.7 billion to buy Whole Foods in June 2017. The Seattle e-commerce giant has its own approach to deliveries, including free two-hour delivery from Whole Foods for Amazon Prime members. Amazon did not respond to a request
spond to a request for comment.
Whole Foods and Instacart inked a five-year deal in 2016. Whole Foods has been one of Instacart’s bigger supermarket clients, although in recent years Instacart has delivery deals with other major retailers, including Kroger, Costco and Sam’s Club. Whole Foods now accounts for just 5 percent of Instacart’s revenue, according to sources cited by Bloomberg News.
However, some people who work as shoppers for Instacart disputed this.
“Despite what Instacart is saying publicly, WF accounts for a huge percentage for most of us in metropolitan areas,” emailed Liz Temkin, who does shopping for Instacart in Los Angeles and estimates that Whole Foods accounts for half of her business. “To me, this is the nail in the coffin.”
She said she used to make $900 a week “easily” with about 30 hours.
“Those days are gone, permanently,” Temkin wrote. “I don’t see working for Instacart as a viable option to support myself.”
She and other shoppers said Instacart had repeatedly changed the pay structure to make working for it less lucrative, a move Instacart characterized as more about implementing new features.
Instacart, which is valued at $7.87 billion on the private markets, has more than 70,000 shoppers, the vast majority of whom work as independent contractors who handle both picking groceries from store shelves and delivering them.
About 2 percent work as “in-store shoppers,” a part-time job for which they are stationed at a specific store. Instacart said 1,415 in-store shoppers work at 76 Whole Foods locations, with 243 expected to be affected in early February and the rest in coming months. Instacart said it expected to be able to place more than three-quarters of the Whole Foods in-store shoppers at other stores.
Of course, many more Instacart shoppers, like Temkin, handle Whole Foods deliveries on a freelance basis.
For now, Whole Foods remains an option in Instacart’s app so its customers can still order from the chain. Whole Foods will withdraw from the Instacart marketplace in coming months.