Technology/Services

Kroger Launches ‘Virtual Convenience Store’

Grocer debuts national delivery service with Instacart
Photograph courtesy of Kroger

CINCINNATI and SAN FRANCISCO Grocery retailer The Kroger Co. and online delivery platform Instacart have launched Kroger Delivery Now, a new service the companies describe as a ‘virtual convenience store’ offering fresh groceries, meals, snacks and household items fulfilled by Kroger stores. The collaboration establishes Kroger as the first grocery retailer to directly provide a national convenience delivery solution through its site and app and Instacart’s new Convenience Hub on the Instacart Marketplace.

Kroger exited the brick-and-mortar convenience-store business in 2018 when it sold its portfolio of 762 c-stores under several banners to Blackburn, U.K.-based EG Group for $2.15 billion.

“Kroger Delivery Now is a differentiated solution in the e-commerce industry, not just the grocery sector,” said Rodney McMullen, chairman and CEO of Cincinnati-based Kroger. “Our new service provides customers with one more way to shop with us and addresses the importance of convenience and immediacy.”

The service offers 25,000 items and reaches up to 50 million households, he said, “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.”

Convenience continues to be one of the most popular categories on Instacart, with orders up more than 150% since May 2021, the companies said. Demand for rapid delivery also continues to grow, with nearly 20% of customers selecting Priority Delivery at checkout. By using Kroger’s existing network of more than 2,700 stores, Kroger Delivery Now creates a “first-of-its-kind virtual convenience experience that makes faster delivery possible” to customers across the country who live near a store, including Kroger, Ralphs, Fred Meyer, King Soopers, Fry’s, Mariano’s and Smith’s locations, said the companies.

With the launch of Kroger Delivery Now, Instacart has unveiled the Convenience Hub on the Instacart Marketplace, a new product experience that streamlines convenience shopping for customers. Through the new Convenience Hub, customers in nearly every major U.S. city can now shop 24 hours a day, seven days a week with free Priority Delivery in as fast as 30 minutes for Instacart Express members on orders over $10.

“Kroger Delivery Now, available only on Kroger.com and the Instacart Marketplace, reimagines the modern convenience store by leveraging the entire network of iconic Kroger family of stores brands to offer 30-minute delivery to customers for the first time nationwide,” said Fidji Simo, CEO of San Francisco-based Instacart.

“Instacart is one of our strategic partners and their industry-leading scale and ingenuity complements Kroger’s best-in-class assets, digital strategy and expanding seamless ecosystem, helping enable us to continue growing our business,” said McMullen. “Kroger Delivery Now reinforces our commitment to leading with fresh and accelerating with digital in an environment of increased and sustained customer expectations for fresh food on demand. This service is truly a gamechanger, and we’re eager to continue leading the way by expanding our ecosystem and leveraging our complementary assets to deliver a seamless experience with our total network of assets, including enterprising and innovative last-mile solutions—today’s true competitive horsepower—in the most scalable, sustainable and profitable way to advance our business and create a consistent and rewarding customer experience whether they want groceries now or tomorrow.”

Kroger and Instacart first partnered in 2017 and previously offered two-hour grocery delivery. The companies expanded their partnership in 2019 to include alcohol delivery, and Instacart now powers alcohol delivery from nearly 1,500 Kroger stores across 15 states. Kroger had more than $10 billion in e-commerce sales in 2020, and the retailer plans to double digital sales and profitability rate by the end of 2023 with help from Kroger Delivery Now, McMullen said.

Kroger operates approximately 2,750 grocery stores under a variety of banner names. Instacart delivers from nearly 55,000 stores across more than 5,500 cities in North America. Instacart’s platform is available to more than 85% of U.S. households and 80% of Canadian households.

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