July 20, 2017

Instacart everywhere: Grocery-delivery service plans big expansion

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Image Courtesy of Instacart

Now in 40 markets, Instacart plans to double its presence to 80 U.S. cities by year end. This week it’s adding Detroit; Las Vegas; Brownsville, Texas, and Columbus, Ohio. It’s also enlarging existing markets, spreading to more suburbs in Chicago and Indianapolis, for example.

“Our goal is to cover 70 percent of U.S. households by the end of 2018,” said Max Mullen, who co-founded the San Francisco company in 2012 and now leads its consumer products. “We’re offering delivery services in not just tight urban areas but also the outer rings of where people live.”

The payout could be immense. Groceries are a $675 billion a year market in the U.S., yet only 2 to 4 percent of shoppers currently buy online. That could change as a mobile, tech-savvy generation no longer feels the need to personally sniff melons and eyeball beef tenderloins. Online grocery sales could hit $100 billion by 2025, according to a study from the Food Marketing Institute.

Instacart faces competition from Amazon, Google and Postmates, as well as smaller startups like San Francisco’s Good Eggs. But the biggest threat to Instacart’s ambitious plans could be growing discontent among the people who pick out groceries at the […]

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