Groceries In 30 Minutes Or Less? Kroger, Instacart Say They Can Do It

Kroger (KR) is extending its partnership with Instacart to get groceries to North American homes in as little as 30 minutes through a new service called Kroger Delivery Now.

The service grows Kroger’s tie-up with Instacart, which was first started in 2017. At the time, the companies offered a two-hour delivery. In 2019, the pair expanded the venture to include alcohol delivery from nearly 1,500 Kroger stores in 15 states.

Now, Kroger and Instacart will offer 30-minute delivery of 25,000 items from Kroger’s 2,700 stores, reaching 50 million households.

“The consumer’s need for speed is real and here to stay,” Instacart CEO Fidji Simo told the Wall Street Journal. Instacart said priority would be given to customers with 30-minute orders.

As many as 20% of Instacart customers are paying more for faster delivery of their orders, though delays are possible, Simo added.

The Kroger Delivery Now Service takes advantage of consumer demand for grocery delivery during the pandemic as shoppers adjusted to contactless ways to shop. Grocery delivery sales surged during the pandemic but have leveled, still outpacing expectations for pre-pandemic levels, the Journal reported.

“Kroger Delivery Now is a differentiated solution in the e-commerce industry, not just the grocery sector," Rodney McMullen, Kroger's chairman and CEO, said in a statement.

“Our new service provides customers with one more way to shop with us and addresses the importance of convenience and immediacy. Operationally, this service reaches up to 50 million households and it's an expansion of our thriving e-commerce model that demonstrates strategic interplay among our assets, expansive store network, supply chain, and dedicated fulfillment centers and fleet, joined by Instacart's unrivaled fulfillment model and last-mile technology to provide our customers with anything, anytime, anywhere without compromise."

Kroger’s Kroger Delivery Now service will have a $10 minimum and a $2.99 delivery fee, according to the Journal. Its standard grocery service has a $35 minimum with a $3.99 delivery fee. Instacart members wouldn’t pay a delivery fee with an annual membership.

As of Tuesday at 11:39 a.m. ET, shares of Kroger were trading at $42.20, down 68 cents, or 1.58%.