Instacart will expand its relationship with Associated Wholesale Grocers, Inc. (AWG) to offer same-day delivery and smart shopping carts at more locations.

AWG is a cooperative food wholesaler with 1,100 member companies and more than 3,500 locations. The new agreement between the businesses will bring Instacart’s ecommerce technology to all AWG locations across 32 states, from the 800 that previously had access.

“Our joint effort with AWG is more than a partnership; it’s a dedicated effort to empower independently owned grocers to navigate the digital landscape,” said Nick Nickitas, general manager, local independent grocery at Instacart. “Through this collaboration, AWG’s retailers now have access to convenient, cost-effective solutions that allow them to easily bring their stores to their customers’ doors. We’re excited about what we can achieve together.”

What Instacart will offer AWG retailers

AWG grocers will be included on Instacart’s app, where consumers will be able to add products to their carts, check out, and receive same-day delivery from an Instacart driver. Orders can also be scheduled up to two weeks in advance.

Alongside delivery, Instacart will give the grocery retailers access to Caper Cart technology, which uses computer vision and artificial intelligence (AI). The carts automatically identify items placed inside them, which Instacart says will transform the traditional supermarket checkout experience. Customers can place items in bags as they shop and pay through the cart wherever they are in the store, eliminating checkout lines.

Customers who connect loyalty accounts can also access personalized promotions through the carts. 

At the Consumer Electronics Show (CES) in January, Instacart announced that the AI-powered smart carts would make personalized recommendations through advertisements. Recommendations will be based on the time of year, ongoing promotions, and other products already in the customer’s cart, Instacart says. For example, shoppers might receive advertisements for candy ahead of Valentine’s Day, or see an ad for ice cream if they purchase ice cream cones.

“As an AWG member retailer, we’ve been incredibly proud to expand our online business through the Instacart platform,” said Tim Cosens at McKeever’s Price Chopper in a press release. “We understand firsthand the impact that e-commerce and same-day delivery powered by Instacart can drive for our business. As we look ahead to the next chapter, we view Instacart as an integral technology partner and look forward to implementing even more of their omnichannel solutions, like their AI-driven smart shopping carts.”

Other Instacart grocery partnerships

Instacart announced in March that it would introduce same-day delivery for Hy-Vee. 

The grocery chain will use Instacart’s fulfillment-as-a-service (FaaS) capability across its ecommerce channels, including Hy-Vee.com, WholeLotta.com, HyveeDeals.com, ShopPetShip.com and the Hy-Vee app. The relationship with Instacart will allow Hy-Vee to expand its delivery capacity to meet growing demand, it said.

The retailer is also able to accept EBT SNAP online payments through Instacart.

Instacart and Hy-Vee first worked together in 2018. At the time, Hy-Vee introduced same-day delivery through the Instacart app, with delivery in as little as an hour.

Hy-Vee ranks No. 199 in the Top 1000. The Top 1000 database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales.

Richart Galanti, chief financial officer at Costco, said in a recent earnings call with investors that Instacart orders represent about 1.5% of total U.S. Costco sales. Costco ranks No. 6 in the Top 1000.

Instacart also recently announced the addition of Whole Foods to the platform in 14 markets across Canada. Whole Foods is owned by Amazon, which ranks No. 1 in the Top 1000. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database, which ranks the 100 largest such marketplaces by 2023 third-party gross merchandise value (GMV).

Instacart’s financial situation

The fulfillment company said it grew orders 5% year over year in its fiscal Q4 ended Dec. 31 to reach 70.1 million. Gross transaction volume (GTV) also increased year over year, up 7% to $7.89 billion.

Instacart orders grew 3% to 269.2 million for the full 2023 fiscal year. Total revenue grew 19% to $3.04 billion over the same period. 

The business also announced that it would lay off 250 employees, about 7% of its workforce, by March 31. Chief technology officer Varouj Chitilian, chief architect JJ Zhuang, and chief operating officer Asha Sharma all also left the company at that time.

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