Instacart's delivery partnership with Whole Foods is ending, killing hundreds of jobs

InstacartInstacart is a delivery company that pairs customers with personal shoppers to deliver groceries to their homes.
  • Whole Foods‘ groceries will no longer be available for delivery on Instacart.
  • In a blog post on Thursday, Instacart CEO Apoorva Mehta announced that the company’s partnership with Whole Foods would be winding down.
  • Instacart had exclusive rights to Whole Foods delivery before the grocery chain was acquired by Amazon in June 2017.

Whole Foods groceries will no longer be available on Instacart.

On Thursday, Instacart CEO Apoorva Mehta announced in a blog post that the company had ended its delivery partnership with Amazon-owned grocery chain Whole Foods and that the service would be slowly phased out over the coming months.

“We expect to ramp down all remaining Whole Foods in-store shopping operations in preparation for Whole Foods to fully exit our marketplace in the coming months,” he said in the post.

There are 1,415 in-store Instacart shoppers who work specifically at Whole Foods, picking up groceries for orders. These workers will be directly impacted by the change, and for 243 of them, it will mean losing their jobs at Whole Foods on February 10, 2019. Mehta said in the post that he expects to place the majority of these workers in new jobs at other stores.

Instacart partners with 300 different chains across the United States, including Sam’s Club, Costco, CVS, Albertsons, and Kroger.

“For our in-store Whole Foods shoppers who are personally impacted by this news, we’re deeply committed to being transparent about what this means for you and plan to share any updates with you as they become available,” Mehta said.

He continued: “We expect to be able to place more than 75% of all our impacted in-store Whole Foods shoppers in new in-store shopper jobs at another retailer in their area. For our remaining impacted shoppers, we are committed to doing everything we can to support you.”

A spokesperson for Instacart declined to provide further details to Business Insider as to why the partnership ended.

However, Instacart’s partnership with Whole Foods has come under scrutiny since June 2017, when the grocery chain was acquired by Amazon. Before this, Instacart had a deal to exclusively deliver Whole Foods groceries around the US.

Read more:
Instacart’s CEO describes the moment he discovered Amazon was stealing its Whole Foods business

When the news of the acquisition broke, industry experts were left wondering what would happen to the five-year contract that Instacart had signed with Whole Foods in early 2016. Instacart entered the deal only a year and a half ago.

“There’s no longer room for Instacart at Whole Foods,” Guru Hariharan, a former Amazon executive and CEO of Boomerang Commerce, which helps brand manufacturers sell to Amazon, told Bloomberg in March. “It’s only a matter of time before Instacart is edged out completely.”

At the same time, Bloomberg reported that Instacart shoppers at a store in San Francisco were having to prepare deliveries in the corridors after being pushed out of designated packing areas by Amazon’s own delivery staff.

In November, Instacart announced that it would be cutting its membership fees, which for a short time had made it a more affordable delivery option than Amazon for Whole Foods orders.

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