Please ensure Javascript is enabled for purposes of website accessibility

Walmart and Instacart to Finally Partner on Grocery Delivery in the U.S.

By Rich Duprey – Updated Aug 11, 2020 at 1:06PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Same-day delivery will help the retail giant deter Amazon from gaining market share in online grocery sales

Walmart (WMT -0.65%) wants to ensure Amazon (AMZN -2.72%) doesn't encroach on its leadership in online grocery store sales, so it is partnering with Instacart to begin offering same-day delivery.

Although it is starting in just a handful of major cities, it reflects the realization that if the retail king wants to remain on its throne, then speedier, more convenient shopping options are essential.

Man delivering groceries to woman

Image source: Getty Images.

Meeting the deluge head on

The coronavirus has changed how Walmart views the market. Although it has partnered before with Instacart in a limited capacity (last year, they joined to deliver groceries in Canada), the two have not had a relationship here in the U.S. because Walmart only wanted Instacart to serve as a last-mile delivery provider, whereas Instacart wanted to list Walmart products on its marketplace.

While Walmart saw online grocery shopping double during the early days of the pandemic, it lost almost half its weekly share of the market compared with other players as it was unable to handle the crush of demand. 

Data analytics firm Second Measure says Instacart had the opposite result, seeing its share of the market soar to 57% in April.

That likely was enough to convince Walmart to acquiesce, as CNBC reports Instacart will now host the retailer's products on its marketplace as they test same-day grocery delivery in Los Angeles; San Francisco; San Diego; and Tulsa, Oklahoma. 

The news site notes that Amazon is able to offer same-day grocery delivery for its Amazon Fresh and Amazon Prime Now services, using both its own warehouses and its Whole Foods stores. It also still has plans to develop a physical grocery chain separate from Whole Foods.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Walmart Stock Quote
Walmart
WMT
$132.25 (-0.65%) $0.86
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$114.80 (-2.72%) $-3.21

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
342%
 
S&P 500 Returns
107%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.