Instacart Cuts Grocery Delivery Fees to Heat Up Competition Against Amazon, Shipt

Instacart Cuts Grocery Delivery Fees to Heat Up Competition Against Amazon, Shipt

Instacart has slashed prices on grocery delivery by a third, making the service a more competitive and cost-feasible option than Amazon, which delivers groceries from Whole Foods through its Prime Now service, and rival grocery ecommerce service Shipt.

In a Nov. 28 e-mail from the third-party service to its customers, Instacart dropped its delivery fee from $5.99 to $3.99 per order of $35 or more, though customers still pay a 5 percent service fee and $3.99 default delivery fee. Orders arrive within two hours of placement.

Moreover, the grocery technology company's subscription service, Instacart Express, now costs $99 per year, compared to $149, and offers unlimited free grocery delivery on orders of $35 or more with no service or default delivery fee. Monthly Express membership is $9.99.

"We've made grocery delivery more affordable. … Let our personal shoppers take care of your grocery shopping while you save an hour or two," the grocery ecommerce service said in the e-mail.

Currently, members of Amazon's Prime subscription program can enjoy two-hour delivery of groceries from Whole Foods for free, and ultra-fast delivery within one hour for $7.99 on orders of $35 or more. An Amazon Prime membership costs $119 annually – up $20 as of May – or $12.99 per month, but the value over Instacart arguably is unlimited free two-day delivery through Amazon, content streaming and more, which the San Francisco-based delivery service does not offer.

Comparatively, Birmingham, Ala.-based Shipt – which is marking one year since being acquired by mass-merchandiser Target, which itself is No. 13 among America's top grocers – offers members free delivery for orders of $35 or more, with orders below that costing a flat $7 delivery fee. Membership costs $99 per year, or $14 monthly.

About the Author

Randy Hofbauer

Randy Hofbauer is the former digital and technology editor of Progressive Grocer. He has more than a decade of experience as a content strategist, researcher and marketer, almost all of it covering CPG retailing. His insights and work have been cited in a number of media outlets, including The New York Times, the Associated Press and the Chicago Tribune, and he was named a finalist in the Software & Information Industry Association's 2018 Emerging Leader Awards. Follow him on Twitter or connect with him on LinkedIn.

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