Sam’s Club partners with Instacart for delivering groceries to shoppers

Shopper can buy a wide range of goods and groceries, even without a Sam’s Club membership, and have it delivered it to them within the hour. Incidentally, the online grocery market in the U.S. is expected to grow $41.7 billion by 2022.

On Tuesday, Sam’s Club, a unit of Walmart Inc, said it will offer home delivery through Instacart.

Though this move Sam’s Club, has become the latest retailer to enter in the retail food industry following Amazon’s $13.7 billion purchase of organic grocer Whole Foods in late 2017.

Sam’s Club disclosed the service will be available to shoppers in Austin and Dallas-Forth Worth in Texas, and St. Louis; shoppers can place orders from a wide variety of goods ranging from fresh produce to small appliances, even without a membership.

Sam’s Club’s partnership with Instacart comes at a time when the grocery industry is seeing intense competition and has prompted grocery retailers to look for ways to profitably deliver fresh food and pantry items.

This deal is part of a strategic shift by John Furner, Sam’s new CEO, as he attempts to turn around a business that has underperformed against rivals such as Costco Wholesale Corp. Recently, Sam’s Club also consolidated its membership structure and shuttered nearly a tenth of its stores and laid off more than 10,000 workers.

San Francisco-based Instacart, is a startup that handles shopping and delivery of groceries from around 200 retailers including Costco and Target Corp. Through its app, shoppers can order groceries from a preferred store and have it delivered to them within the hour.

Instacart business model revolves around delivery fees and through promotions and coupon deals it has with many consumer goods manufacturers.

In its latest funding round, earlier this month, it raised $200 million.

In October 2017, Walmart, the world’s biggest brick-and-mortar store which sells groceries more than any other retailer, acquired Parcel, a New York-based same-delivery company.

While Amazon has cornered 18% of the $12.6 billion U.S. online grocery market, Walmart comes a distant second with a market share of 9%, followed by Peapod at 7%, FreshDirect at 6% and Instacart at 5%, said Packaged Facts, a market research firm.

The online grocery market in the U.S. is expected to grow $41.7 billion by 2022, said Packaged Facts.

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