instacart-logoGrocery delivery startup Instacart seemed to be well on its way to being a significant competitor with Amazon Fresh, but now its plans may have hit a snag.

The company recently expanded its service to Chicago, naming Trader Joe’s the first (and only) store available through the service in the Windy City. That move drew a lot of media attention, and it would seem it also drew the ire of Trader Joe’s.

According to a post to the Instacart blog, the company has ceased deliveries from Trader Joe’s until further notice.

“Instacart has temporarily stopped making deliveries from Trader Joe’s while we work out a more formal relationship with the company,” an Instacart PR representative told Crain’s Chicago Business. The company confirmed the curtailing of Trader Joe’s deliveries in an email to GeekWire.

That’s not very good news for the grocery delivery company, which recently received a $8.5 million investment from Sequoia Capital. Being able to deliver food from Trader Joe’s was a feature that Instacart prided itself on, and made it unique amongst its competitors, including Amazon Fresh and Google Shopping Express.

Apoorva Mehta
Apoorva Mehta

“What we have seen from our data is that customers want selection. Customers want to be able to order from Trader Joe’s and from Whole Foods,” Instacart CEO and former Amazon engineer Apoorva Mehta told GeekWire in June. “They have loyalties associated with the ‘two-buck chuck,’ with the frozen burritos at Trader Joe’s, as well as organic produce that only your Whole Foods carries.”

But Trader Joe’s likes being in control of where its products appear, as evidenced by its lawsuit against the owner of Pirate Joe’s, a store in Vancouver, B.C. that re-sold Trader Joe’s products bought in Washington. Though the lawsuit was dismissed because a judge in the case ruled that the U.S. District court in Seattle didn’t have jursdiction, Trader Joe’s has banned the store’s owner from shopping at any of its stores.

At the time of the Chicago launch, Instacart didn’t have any partnerships lined up with grocery stores, which may explain the Trader Joe’s outage. It seems that Trader Joe’s now wants to figure out if a long-term relationship with Instacart is in the cards. In the meantime, Instacart’s users will have to go to Trader Joe’s themselves.

The company’s delivery service is still running though, with shoppers in the Bay Area able to order from Whole Foods, Safeway, Costco and Instacart’s own Instacart Plus service. Chicago users are able to order from Dominick’s, a chain owned by Safeway.

Comments

  • InstaLie

    LOL, sounds more like the company announced a “partnership” when no partnership existed. How embarrassing to be called out for it.

    I also have “partnerships” with QFC, Safeway, Costco and Whole Foods…

    Just an FYI, a ‘partnership’ means legal agreement and both parties agreeing.

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  • InstaFAIL

    InstaCart is A JOKE..When people actually catch on that this guy is scamming people and pricing all the items 30% higher than what the stores have them priced this business is going to fail. It seems like this guy didn’t do his homework and he’s just trying to make a quick buck.

    • Dee dee dee

      You are the joke , instacart is growing at a furious pace….of course it’s priced more…..it’s called making a profit, business 101, try telling the folks with no car or the lady on couches if paying a premiums worth .,,,

      • Hannah

        Except that they’re essentially reselling the product at a premium with no existing arrangement with TJs. They’re also not exactly transparent that the markup is so exorbitantly high.

  • InstaLove

    Does instacart have an agreement with wholefoods and safeway that allows them to resell their products???

  • Sarah

    That sucks. I guess I’ll keep ordering from http://www.traderjoesdelivery.com then.

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