retail news in context, analysis with attitude

Bloomberg has a story about how, despite the fact that Whole Foods was an early customer of and investor in delivery service Instacart, there is evidence that since the grocer was acquired by Amazon that it is marginalizing the company.

“Last month,” the story says, “Amazon announced it would begin offering free two-hour delivery from Whole Foods stores in Dallas and Austin, Texas; Virginia Beach, Virginia, and Cincinnati. On Tuesday, Amazon said the service is expanding to San Francisco and Atlanta. All of which puts Instacart in an awkward spot. The San Francisco-based company champions itself as an alternative for brick-and-mortar retailers girding against the threat of Amazon, but now Whole Foods, Instacart’s partner and investor, is a subsidiary of its biggest rival.”

There are places where Instacart employees are working side-by-side with Amazon workers. But there also are places, the story says, where Instacart’s people have been shunted to less desirable working spaces, which illustrated the new reality of their relationship.

According to Bloomberg, “Instacart declined to comment on whether Whole Foods is violating the deal by allowing Amazon to deliver its goods. A representative for Whole Foods declined to comment, and Amazon didn’t respond to requests for comment. Instacart says it will continue to honor its side of the agreement, but will focus its resources on its growing list of non-Whole Food partners.”

Like Walmart-owned Sam’s Club and Costco, each of which competes directly against Amazon.
KC's View:
I have to believe that Whole Foods will do what is has to do to live up to the contract, but will transition to an Amazon-driven system as quickly as possible.

At the same time, I still believe that Instacart is going to be acquired, and I won’t be surprised if Walmart is one of the suitors.