Instacart Will ‘Wind Down' Its Partnership With Whole Foods
The grocery delivery service has been on shaky ground since the Amazon buyout.
Only two weeks ago, Instacart made a bold move: The grocery delivery service dropped its annual fee from $149 to just $99—a decision that most analysts saw as intended to undercut the cost of Amazon Prime, which currently sits at $119 per year. Though attempting to beat a competitor on price is a common business tactic, in this instance, it came with a wrinkle: Instacart was still a delivery option at Whole Foods—you know, that grocery store chain that is now owned by Amazon.
Whether Amazon was provoked by that pricing change or Instacart simply saw the writing on the wall, the other shoe has dropped: Instacart announced its relationship with Whole Foods "is now beginning to wind down," according to a blog post from Founder and CEO Apoorva Mehta.
"Today, we have 1,415 in-store shoppers across 76 Whole Foods locations," the post continues, specifying the actual timeline. "Out of this community of in-store shoppers at Whole Foods, 243 will be impacted beginning February 10, 2019. In the months that follow, we expect to ramp down all remaining Whole Foods in-store shopping operations in preparation for Whole Foods to fully exit our marketplace in the coming months."
Frankly, the partnership had been a vestige of an earlier time anyway. Instacart began working with Whole Foods back in 2014, when, as you may vaguely recall, the grocer wasn't owned by Amazon. Before the buyout, Instacart was the exclusive delivery provider for Whole Foods—but that deal was sure to change when Amazon took control. So in some ways, it's actually kind of shocking that Instacart was able to hang around for over a year—though TechCrunch still reports that one of its sources said that the relationship has ended earlier than planned.
Instacart expressed a desire to help impacted employees in any way possible, saying they "expect to be able to place more than 75% of all our impacted in-store Whole Foods shoppers in new in-store shopper jobs at another retailer in their area." If not, the company offered up multiple options including finding other roles "within or outside of Instacart" and "offering a transfer bonus to support your overall transition." Meanwhile, for those not interested or able to change roles, "we'll be providing a minimum of 3-months separation package based on your maximum monthly pay in 2018, as well as additional tenure-based compensation."
And despite losing its Whole Foods partnership, Instacart wouldn't appear to be in major trouble yet. The brand currently has about 70,000 shoppers in total and still works with over 300 retailer brands including big names like Kroger, Walmart, and Costco. It seems that Whole Foods is well on its way to owning its delivery services through Amazon, including special benefits for Prime members.