Instacart - statistics & facts
At the forefront of grocery retail and technological progress, Instacart is one of the leading grocery delivery companies in the United States and Canada. In the third quarter of 2024, Instacart generated more than 850 million U.S. dollars in revenues, a clear nod to a strategy of consistent growth and innovation since it went public in September 2023.
By leveraging its subscription model and successful advertising business, Instacart can effectively balance growth and profitability despite rising competition. However, as other players in the food delivery space also capitalize on customer loyalty, the companies that succeed will be the ones that place customer satisfaction at the center of their value proposition.
Navigating competition in the U.S. food delivery market
Instacart was one of the early movers in the on-demand grocery delivery market in the United States, surviving a cut-throat competitive landscape that took shape in the wake of the coronavirus pandemic. In 2023, Instacart generated more than three billion U.S. dollars in annual revenues, trailing behind U.S. food delivery market leaders DoorDash and Uber Eats. Other competitors in the grocery and convenience delivery space include Amazon Fresh, Walmart, and Shipt. In a survey conducted in September 2024, around 54 percent of online grocery shoppers in the U.S. were Walmart customers, and 40 percent reported ordering groceries from Amazon Fresh. Instacart shared the third spot with Costco, at 22 percent of U.S. online grocery shoppers.Loyalty, the secret ingredient?
While the U.S. food delivery market was once overcrowded with aspiring potential from Postmates to Gopuff to Getir and Gorillas, the post-pandemic recession led to many acquisitions and market exits. Yet, the online grocery landscape remains highly competitive, as the companies that remained vie for dominance. To achieve the twin imperatives of growth and profitability, companies are turning to subscription models to lock-in customers and consolidate their market share. Instacart's very own subscription model, Instacart+, offers its paying monthly customers free delivery and the elimination of per-order fees, encouraging consumers to place more frequent and smaller orders. The subscription model also helps Instacart retain its customers, reducing their incentive to switch to competitors like Amazon Fresh or Walmart. However, many food delivery companies are resorting to loyalty discounting schemes to reduce customer churn and compete with their rivals. In October 2024, approximately nine percent of U.S. online shoppers were subscribed to Instacart+, but competitor alternatives like Walmart+ and DashPass accounted for 25 percent and 11 percent of shoppers, respectively.By leveraging its subscription model and successful advertising business, Instacart can effectively balance growth and profitability despite rising competition. However, as other players in the food delivery space also capitalize on customer loyalty, the companies that succeed will be the ones that place customer satisfaction at the center of their value proposition.
