Kroger, Instacart Partnering to Offer 30-Minute 'Delivery Now' Service
Kroger, the country's largest grocery retailer, announced Tuesday it's partnering with online platform Instacart to offer customers 30-minute delivery service. Called Kroger Delivery Now, the service will include 25,000 items, including food and household essentials, from Kroger and its banner stores for customers to order and receive at their homes. Kroger and Instacart have been partners since 2017, when they began offering two-hour grocery delivery, according to the press release. The companies expanded their partnership in 2019 to include alcohol delivery.
Kroger Chairman and CEO Rodney McMullen said up to 50 million households will have access to the service. Kroger reported more than $10 billion in e-commerce sales last year, and McMullen said the grocer is committed to doubling those digital sales and profitability rate by the end of 2023 with the help of Kroger Delivery Now.
Total Retail's Take: COVID-19 has changed the way many people shop for groceries, and home delivery has become the future for grocers and online delivery platforms. In 2019, a Gallup poll found that 81 percent of American respondents had never ordered groceries online; one year later, an Inmar Intelligence survey found that the opposite was true — nearly 80 percent had reported shopping for groceries online after the COVID-19 outbreak.
This latest move puts Kroger and Instacart in the playing field with Amazon.com and Uber, two companies whose grocery delivery business have thrived during the pandemic.
However, there are some potential questions that will need to be answered before the service is rolled out. The ongoing labor shortage could have an impact on Kroger Delivery Now. CNBC reported that the deliveries would be fulfilled by gig economy workers from Instacart; Kroger, meanwhile, has 20,000 job openings, McMullen said in an interview with CNBC.