retail news in context, analysis with attitude

Re/code reports that grocery delivery company Instacart has raised "both its minimum delivery and annual subscription fees by 50 percent. Minimum delivery fees are increasing in most instances from $3.99 to $5.99. At the same time, the annual fee for Instacart Express, a membership that includes unlimited two-hour and scheduled deliveries, is jumping from $99 to $149."

And, the company reportedly has laid off 12 in-house recruiters, and in a statement attributed the move "to the company’s plans to be less aggressive in hiring in 2016 than it was in 2015, when its staff tripled, from just under 100 employees to a little more than 300."

The story goes on to say that "a substantial portion of Instacart’s revenue originally came from marking up the in-store price of a given item, but the company now often charges the same price as the grocer, but takes a cut of the sales from the store. Earlier this year, Instacart finally began being transparent about when it was charging higher prices than its partner grocers."
KC's View:
The suspicion here is that Instacart may be coming up against some hard realities ... one of which is that its business methods - essentially putting retailers in the position that they have to do business with them because otherwise Instacart will just shop their stores anyway and hurt their price image - may hurt long-term and sustainable growth.

I know of retailers that have signed up with Instacart with the full intention of working with them only until they can come up with a better option.

These chickens may be coming home to roost.