(Bloomberg)—Amazon.com Inc.’s expansion into the grocery industry may be pushing more supermarket chains into the arms of Instacart Inc., a delivery service that helps retailers fill online orders.
Albertsons Cos., the second-largest traditional grocer in the U.S. and No. 157 in the Internet Retailer 2017 Top 500, is the latest to team up with the startup on same-day delivery. Instacart will provide its service at more than 1,800 of the chain’s stores by the middle of next year, Albertsons said on Tuesday.
Earlier this month, Kroger Co. (No. 88), one of Albertsons’ chief rivals, said it was starting a pilot test with Instacart at some of its stores in Southern California.
The grocery industry has been roiled by Amazon’s takeover of Whole Foods Market, a deal that’s expected to encourage more shoppers to order food online. For traditional supermarkets, third-party services such as Instacart and Shipt are seen as a way to protect their business.
The Whole Foods deal also put pressure on Instacart to make friends in the industry. The startup has served as the exclusive delivery partner for Whole Foods, but with Amazon (No. 1) in the picture, there’s been speculation that the agreement won’t last. As it adds more partners, Instacart now operates in more than 150 geographic markets.
Instacart, founded in 2012, still has a few years left on its contract with Whole Foods, which invested more than $30 million in the San Francisco startup in 2016.
Albertsons, meanwhile, has been struggling to rebound from a stalled initial public offering. The grocer had considered going public by the end of 2017, but the plans were delayed after Amazon announced its deal to buy Whole Foods, a person familiar with the matter said in July.