Grocery-delivery service Instacart Inc. once seemed like the perfect partner for supermarkets looking to break into e-commerce. After several years together, though, some grocers are starting to question the relationship.
Instacart’s technology provided a ready-made solution for grocery chains that hadn’t yet created options for customers to shop online. And it became even more attractive when delivery demand ballooned with the pandemic, providing armies of on-demand shoppers to fulfill orders in-store and deliver groceries to people’s homes.
But many supermarkets say they aren’t making money through Instacart, largely because the delivery company typically charges them a commission of more than 10% of each order. Some of Instacart’s retailer partners say the service holds too much control over customer interactions and expect it to take an increasing share of money that food makers spend on marketing. All that has put grocers in a bind, as delivery continues to boom and becomes a necessity.