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Bloomberg has an interview with Instacart CEO Fidji Simo in which she says that the company is contending with "unique challenges emerging from a post-pandemic world. Instacart, which is vying to build a sizable advertising operation, is depending on that higher-margin revenue stream to keep prices on the marketplace from rising. However, recent supply-chain disruptions complicate Simo’s balancing act: Advertisers are scaling back ad budgets and consumers are seeing more items out of stock.

"While prices on the app haven’t increased substantially, Simo said, Instacart is highlighting more deals from brands to offset of the rise in food costs. But that lever comes with the trade-off of crowding the app with promotions. Over the long term, Simo said the company is developing more products to take prices down and it’s 'definitely something that we’re keeping an eye on'."

Simo also tells Bloomberg that Instacart will eventually go public … that she expects e-grocery to grow from the current 10 percent of total food shopping now to 30 percent in just a few years … and that " Instacart is focusing on the battle to acquire more customers by boosting membership in its subscription service, Instacart Express, which sees higher rates of customer retention."

“I see Instacart as the platform that grocery retailers are going to turn to in the fight against Amazon,” Simo tells Bloomberg, which writes that "before it can establish itself as supermarkets’ savior, Instacart has to convince grocery partners that it has no plans of becoming a competitor."

KC's View:

The problem is, as Instacart goes to manufacturers for deals and promotions that exist separately from those that suppliers are offering retailers, and as it brings together customer data from retailers, it positions Instacart to create a competitive entity … or, at the very least, disintermediate traditional retailers from their shoppers.

And, we know that Instacart has weaponized shopper data against former client retailers, because it has done so.

Retailers are beginning to get the message, and I'm beginning to hear from retailers who suddenly are expressing skepticism about Instacart.  But, to be fair, retailers also keep signing on, because Instacart has positioned itself effectively as being an easy solution to retailers' e-commerce needs.  

But these retailers potentially are selling their souls.