Whole Foods to take Instacart partnership to new level

Whole Foods Market has been offering deliveries via Instacart in select markets for about a year, but reportedly is significantly extending the scope of the deal.



According to Re/code, Whole Foods has at least in principle made an unspecified investment in Instacart. Whole Foods has also reportedly signed a five-year deal making Instacart its exclusive perishables delivery provider.



Whole Foods has previously reported that Instacart sales comprise a mid-to-high-single-digit percentage of sales in the 16 cities where it currently partners with the delivery provider. These cities include Atlanta; Austin; Boulder; Boston; Chicago; Denver; Houston; Los Angeles; New York City; Philadelphia; Portland, Oregon; San Francisco; San Jose; Seattle and Washington, D.C.



Whole Foods would presumably obtain tighter control over what is becoming an increasingly large in-store sales driver with this partnership, while Instacart obtains financing and long-term stability with a major client.



Assuming the investment and partnership go through (Whole Foods and Instacart have declined comment so far), it is possible other Instacart retail partners may have issues with a competitor financially benefiting from their online deliveries. Also there could be concerns about Whole Foods having access to competitive information.



In addition, Google has been using a Whole Foods store in San Francisco as a source for its recently launched Google Express perishable delivery service in that city. The status of that agreement in the wake of an exclusive Instacart partnership is unclear.