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

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

By Randy Hofbauer - 11/29/2018
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

Randy Hofbauer is Progressive Grocer's digital and technology editor. He has more than a decade of experience as a journalist, researcher and content strategist, almost all of it covering CPG retailing. Read More