The subset "Americans who use Instacart for Whole Foods deliveries" combined with the subset "Americans who subscribe to Amazon Fresh" might just add up to 100% of a subset "Americans who pay to have their groceries delivered".
In other words, Amazon picked up the top end of the market, while Instacart is left with slim pickings. While their investor deck might feature millions of people worldwide ordering deliveries from their local grocery place, in reality most people (a) don't consider grocery shopping stressful, (b) prefer to pick their own produce based on personal requirements on ripeness/size/shapes/colors, (c) happen to drive by the grocery store anyways on their way from work or (d) are low-income and would rather not pay the delivery fees.
For starters it's a good bet that your average Walmart customer will pay approximately zero premium for home delivery. More broadly it's just not something people have voted with their wallets for. The Silicon Valley developer who deeply resents and is stressed out by a trip to the supermarket is just not your average consumer.
Sure, a bunch of small/desperate retailers will do this in the short term, but the small handful that will still be around in 5-10 years know that owning the direct relationship with the customer is non-negotiable.
Amazon-level supply chain management and logistics as a service/consultancy.
Amazon started doing grocery delivery in the Sacramento area this year and I haven't touched Safeway again since.
With the Whole Foods purchase I cannot wait for them to completely change how I buy food.
Do you comparison shop at different supermarkets to figure out what the highest quality food is for the lowest price?
If you are like me you did that one or two times when you moved to a new area, but then stick to buying everything from the same store which I thought had the best quality food for the best price in general. The relationship that I have with that grocery store keeps me from shopping around prices at other locations.
No, of course not. That's what the weekly newspaper flyers are for. On the other hand if one is relatively well off, then the strategy you propose of picking a store that seems like an overall good value and sticking to it may make more sense than spending valuable time poring over grocery store flyers and making trips to multiple stores.
This difference in behavior (combined with coupon clipping) is pretty much the quintessential example of how retailers can implement price discrimination - i.e. charging higher prices to those with a greater income or greater willingness to spend.
Could be that Instacart does the same thing. Providing value and supply chain for smaller stores.
I think the real risk is that Amazon enters the market and quickly enters into a relentless price war that makes the ~20% premium compared to in-store prices that Instacart puts on every product untenable and sucks the entire market into an unprofitable quagmire from which other grocers will struggle to escape, because Amazon can afford to subsidize its grocery business for longer than its competitors can survive.
IMO, the Instacart bull scenario is that they manage to survive Amazon's arrival and gradually take on a larger share of the consumer grocery market, turning their grocery partners into urban warehouse/distribution center operators with vestigial storefronts attached.
The Instacart bear scenario is that the entire non-Amazon grocery market collapses in the same way bookstores did over the past 20 years, leaving behind only a few specialty stores that cover niches that Amazon finds unprofitable to enter, and that Instacart's potential partner base is too sparse and fragmented for them to survive.
Second, most of that cash on hand comes from the last 18 months or so, when Amazon started doing some profit-taking - maybe for the sorts of Whole Foods acquisitions they're doing. It's quite clear that Amazon can make profits - thus far they've just been pouring them back into growth and R&D. See the first chart in https://www.recode.net/2017/4/27/15451726/amazon-q1-2017-ear...
Third, don't be so rude.
Amazon is entering into grocery delivery service and the writing on the wall is that prices of grocery delivery will go down. Significantly down. Amazon will be definitely start doing grocery delivery with loss.
But on the bright side, Instacart might end up being a good acquisition target - maybe Safeway? Costo? Walmart?
Many of them have tried and failed. Multi-state chains have to solve all the same problems that Instacart does with much less technical expertise. Grocery store chains are not actually aware of what they have in inventory, for example; managers just order stuff when they're almost out.
Not just affordable, but brands that customers in the larger segment would recognize. The high end products at Kroger, Safeway, etc, are often things not sold at WF.