More Competition for Amazon as Walmart Partners with Instacart

Walmart and Instacart are partnering together to offer same-day delivery to grocery shoppers.

The partnership will offer services in Los Angeles, San Francisco, San Diego, and Tulsa, Oklahoma.

“The new partnership brings thousands of items — from groceries, alcohol and pantry staples to home decor and improvement, personal care, electronics and more — at everyday low prices from Walmart stores to customers’ doors in as fast as an hour,” an Instacart spokesperson said in a statement.

Instacart allows customers to place orders for delivery, and the contract workers will shop for the items in-store and deliver them to the customer. Alternatively, customers may choose to purchase items for pickup at select locations, and the contract workers will package up the items in store.

Walmart is the latest major grocery chain to team up with Instacart to compete with Amazon’s delivery of Whole Foods groceries. Amazon also offers services called Amazon Fresh and Amazon Prime Now from its warehouses, which provide similar features.

Walmart is one of Amazon’s top competitors, according to CNN. Instacart claims to give customers access to their orders “in as fast as an hour.” Meanwhile, Amazon offers free two hour delivery for its Prime members.

During the congressional Antitrust hearing before the House Judiciary subcommittee on antitrust on July 29, Amazon CEO Jeff Bezos used the growth of Instacart to support his proposition that Amazon does face competition in the market.

“In recent months, curbside pickup of online orders has increased over 200%, in part due to COVID-19 concerns. We also face new competition from the likes of Shopify and Instacart — companies that enable traditionally physical stores to put up a full online store almost instantaneously and to deliver products directly to customers in new and innovative ways — and a growing list of omnichannel business models,” said Bezos.

Three years ago, Instacart’s prospects looked bleak when Amazon acquired Instacart’s then-largest partner, Whole Foods. But now, with consumers shifting over to grocery delivery services at unprecedented rates, Instacart has added hundreds of thousands of new contract workers and raised $325 million in new financing, giving it a valuation of nearly $14 billion.

In addition to Walmart, Instacart has over 400 retailers in its network in North America, including Aldi, Costco, Kroger, and Wegmans.

“We’re always looking for partners to help us better serve our customers. Customers love the value we bring with pickup and delivery. As we continue to expand our own delivery from nearly 3,000 stores reaching nearly two-thirds of American households, we’re excited to test and learn in four markets reaching new customers with Instacart,” said Walmart spokesperson Molly Blakeman in a statement to CNN Business.

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