Instacart has eaten up another market sector by partnering with Wegmans, a family-run East Coast grocery chain with 92 stores and $8.4 billion in annual sales. This is the next move in the San Francisco grocery delivery startup’s quest to push business beyond dense city centers and into more sprawling suburbs.
Wegmans’ cult following may be the perfect test group to show whether Instacart’s delivery model can work in less-dense areas. The chain’s loyal customers present a best-case scenario, so if this partnership works out for Instacart, it’ll be a sign that the concept can work in the suburbs. If not, it’s hard to imagine that a partnership with a more mainstream (but less beloved) store would have greater success.
Instacart will deliver Wegmans first to the Washington, D.C. suburbs of northern Virginia and Maryland. Boston and other markets are soon to follow, with dozens of Wegmans stores slated for Instacart coverage within the next few months.
Customers will order through a dedicated page on the Wegmans website or through the Instacart app. The grocer is charging a $5.99 delivery fee for orders of $35 and up, plus charging a little more per product than it does in the store.
Knowing it planned to try its luck in the suburbs, Instacart raised $400 million this year to spend on customer acquisition and worker guarantees during the first six months in a new market, when the company won’t be turning a profit.
Instacart has also recently expanded its partnership with Publix, the $34-billion grocer serving the Southeast region of the U.S.