Last month at the GeekWire Summit Instacart CEO Apoorva Mehta said Amazon’s purchase of Whole Foods for $13.7 billion would be a “blessing in disguise” for his company. Turns out he was on to something.
Instacart notched another win this week when it signed up Albertsons — one of the biggest grocers in the U.S. — for its online grocery delivery service. CNBC noted that with this deal, Instacart has now signed up the top five grocers in the U.S.: Albertsons, Kroger, Publix, Ahold and H-E-B. The Albertsons and Kroger deals both happened in the wake of the Amazon-Whole Foods merger, a deal that shook up the industry.
“When Amazon bought Whole Foods, what they did was they sent the signal to the entire grocery/retail landscape that Amazon was coming,” Mehta said at the GeekWire Summit. “Now, for every single grocery retailer at this point in time, whether they believed it or not before, now they needed an e-commerce strategy. They needed to have same day delivery. The reality was, for the last five years, that’s what we have done. We have brought hundreds of grocery retailers online, and so we had the track record of being able to do this successfully.”
Albertsons said the service will be live in more than 1,800 stores by the middle of next year and offer deliveries as quick as one hour after an order is placed. Albertsons has stores in 35 states, and some of its brands include Safeway, Vons, Jewel-Osco and Shaw’s.
As competition has ramped up, and Amazon steps into the grocery arena, grocers are beefing up their online and logistics operations. Albertsons, for example, this year began rolling out same-day delivery services, a drive-up grocery option and acquired meal kit company Plated. Other retailers are following suit, in addition to turning to the established Instacart to beef up speedy delivery options.
“At this point retailers are coming to us,” Mehta said. “When the Amazon/Whole Foods announcement happened, essentially every major grocery retailer in the country had an emergency board meeting and right after that board meeting they called us.”