By Kevin Kelleher
December 13, 2018

Grocery-delivery startup Instacart said its five-year partnership with Whole Foods, which seemed doomed after Amazon’s 2017 purchase of the grocery chain, would begin winding down Thursday.

The company has 1,415 in-store shoppers in 76 Whole Foods locations. The company is hoping to place three fourths of them in other nearby grocery stores it works with, but still expects to cut about 350 jobs.

“The first phase of this transition starts today, which means that we have to start scaling back our in-store shopper operations within Whole Foods locations,” Instacart CEO Apoorva Mehta said. “In the months that follow, we expect to ramp down all remaining Whole Foods in-store shopping operations in preparation for Whole Foods to fully exit our marketplace in the coming months.”

Back when Amazon bought Whole Foods in 2017, some commentators thought the merger would be bad news for Instacart because Whole Foods was a popular grocery chain with Instacart shoppers.

As Amazon relies more on its in-house grocery delivery service, Instacart may be able to strengthen its ties to grocery chains that compete with Whole Foods. If so, it may fare better than other startups squashed by Amazon. According to Hal Singer of Econ One Research, Amazon-related casualties in ecommerce include Diapers.com, BareBones WorkWear, and Beauty Bridge.

Instcart was valued at $7.9 billion during its last round of financing last month. Amazon’s stock closed down 0.3% Thursday at $1,658.38.

 

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