Kroger has announced it’s expanding a tie-up with Instacart in a bid to help the two companies solve the same problem: Amazon.
Instacart landed Whole Foods Market as its first national partner in 2014, bringing delivery service to the grocery chain’s customers.
Then Amazon bought Whole Foods, and in due course, announced free two-hour delivery from some stores in Texas, Virginia and Ohio. Then San Francisco, then Atlanta.
That encroachment leaves some uncertainty surrounding Instacart’s future with Whole Foods, with some even speculating Amazon will buy out the contract.
The startup is seeking partnerships with supermarket chains and selling advertising to better compete with the online retailing giant, the Information reported March 7, citing CEO Apoorva Mehta. A $200 million funding round from February should help.
On the other end, Amazon’s push into grocery is leaving brick-and-mortar supermarket chains like Kroger scrambling to compete.
Services such as Instacart are seen as a way to protect their businesses against the growing threat of online shopping and delivery. The company now shuttles goods for the eight largest supermarket chains in North America, including Walmart’s Sam’s Club, Albertsons and Costco.
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