Instacart, the leading online grocery delivery platform, has experienced a 4% decrease in sales during Q1 2022 compared to the same period last year, as reported by Bloomberg Second Measure. This trend began in early 2021 and shows no sign of letting up as Instacart struggles to maintain lasting relationships with retailers and consumers in an ever-changing market. Additionally, Instacart is experiencing a decrease in average quarterly sales per customer, with shoppers spending 9% less on the platform in Q1 2022 than they did in the same quarter in 2021.
While the company remains ahead of its pre-COVID-19 sales, Instacart is facing fierce competition from third-party providers like Uber Eats and DoorDash, as well as from retailers such as Amazon who offer their own delivery services. Inflation is also contributing to Instacart’s challenges, driving up food and fuel prices and eroding consumers’ spending power.
Despite these challenges, Instacart continues to attract more customers, with a 5% increase in customers in Q1 2022 compared to the same period in 2021 and a 65% increase compared to Q1 2020, indicating the platform’s overall popularity with shoppers remains strong. However, the report notes that Instacart’s ability to attract business varies greatly by market, with sales growing in some areas while revenue decreases in others.
To diversify its appeal beyond traditional grocery delivery, Instacart has positioned itself as a technology supplier for retailers, adding automated checkout technology through the acquisition of Caper and emphasizing its advertising capabilities. The company has also been working with retailers to offer 30-minute and 15-minute delivery options, as well as broadening its partnerships beyond grocery stores to include retailers such as Metro, Giant Tiger, and Galleria Supermarket in Canada.
Despite Instacart’s challenges, the company’s strong customer base and its commitment to evolving its business model to meet changing market conditions suggest that it is well-positioned to remain a leader in the online grocery delivery space.
