Whole Foods Cuts Off SF-Based Delivery Service Instacart

In-store shoppers from grocery delivery company Instacart will pack their final bags at Whole Foods Markets this coming spring. Instacart, whose once close relationship with Whole Foods was complicated — if not outright doomed — by Amazon’s acquisition of the grocery chain in 2017, announced the dissolution of its Whole Foods partnership yesterday.

Instacart’s 1,415 in-store shoppers currently stalk the aisles at 76 Whole Foods stores across the US, hunting down groceries, ringing them up, and delivering them to Instacart customers. The San Francisco-based company, founded in 2012, has worked with Whole Foods since 2014.

But this March, when Amazon unveiled Prime Now Whole Foods delivery in the Bay Area (replicating a program already available in Dallas, Austin, Virginia, and elsewhere), pundits began to wonder just how long Instacart would be allowed to compete with Amazon’s in-house delivery program.

Of Instacart’s Whole Foods shoppers, 243 will be out of Whole Foods stores come February 10, with the rest winding down over the following months. Instacart emphasizes that most of its shoppers work across multiple stores, not just Whole foods, and that more than 75 of Instacart shoppers affected by the split with Whole Foods will find work in other stores. The rest are promised a three-month severance package.

For Instacart users in San Francisco that don’t also habe a membership with Amazon Prime, the news is definitely a bummer. But for Instacart itself, it’s not the end of the world.

Whole Foods represents just five percent of the grocery delivery company’s overall revenue, according to Recode. And recently, Instacart has been bagging deals with Kroger, Aldi, Sams Club, and others, as well as scoring $871 million in new funding from investors. Update to Our Partnership with Whole Foods Market [Medium]

• Amazon ends Instacart partnership with Whole Foods [The Verge]
• Amazon has officially killed the Whole Foods-Instacart partnership [Recode]