Costco (NASDAQ: COST) and Kroger (NYSE: KR) have teamed up with Instacart to provide a range of grocery items available for delivery in the Seattle area. The grocers join Whole Foods (NASDAQ: WFM), Trader Joe's and Safeway (NYSE: SWY) in offering fresh food items through Instacart's same-day service.
Seattle will be an important market for Instacart, since the city is home to Amazon, which offers the competing Amazon Fresh program. Instacart is slightly different from Amazon Fresh in that it uses third-party "personal shoppers" to deliver groceries from multiple stores within one or two hours. Amazon sells from its own warehouses, with delivery later in the same day or overnight.
The expansion to Seattle follows Instacart's February launch in Philadelphia and Washington D.C. The service has seen rapid growth since its launch in 2012, with more service areas added in Chicago and plans to expand in the San Francisco Bay area by the end of 2014.
Partnering with Costco makes for an interesting combination, considering that the warehouse club charges members $50 to $100 each year for a membership. Instacart shoppers will not have to pay annual fees, but can still take advantage of the discounted bulk items the club offers via Instacart's business account perks.
Instacart is powered by software that connects customers to existing grocery stores and a small army of people who have signed up to be independent shoppers. Shoppers place their orders online and Instacart delivers them in as little as an hour or at a scheduled time.
While Instacart sets its own prices, which may vary from those seen in grocery stores, and users can't take advantage of a store's daily sale prices, regular coupons or store loyalty cards for discounts, it can be a big convenience for those with busy schedules or commuters without vehicles.
-See this Seattle Times article
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