Heinen’s to ditch Instacart, direct shoppers to its own platform

Heinen’s is ending its five-year relationship with same-day delivery company Instacart starting Wednesday, directing shoppers instead to its own updated mobile app and online shopping platform.

The Warrensville Heights, Ohio-based grocer, which has 23 stores in Ohio and Illinois, announced the change to its customers via social media and its website Wednesday.

“Heinen’s will no longer be available through Instacart, but a new Heinen’s online grocery delivery and curbside service is coming soon,” the grocer said in the announcement on Facebook.  

Heinen’s said its new shopping platform will be at shop.heinens.com and that “your online order will be fulfilled by trained Heinen’s associates who will carefully pick and pack only the best quality groceries for you.”

Instacart on Wednesday confirmed the grocer’s move away from its platform. Heinen’s launched home delivery via Instacart in 2017.

“We’re proud to support retailers of all sizes, and while Heinen’s Fine Foods has decided to stop offering customers the ability to order via Instacart, we continue to expand and deepen our relationship with beloved local retailers across the Midwest—including Aldi, Meijer and Fresh Thyme, among others—and enable retailers to offer the best possible e-commerce experience to their customers no matter how they choose to shop,” Instacart said in a statement to WGB.

Instacart added that it currently works with more than 1,000 retail banners at more than 75,000 stores across North America to facilitate online shopping, delivery and pickup.

But Instacart’s business model has taken some twists and turns since the pandemic’s earliest days, when demand for grocery delivery exploded.

The 10-year-old tech company filed documents with the Securities and Exchange Commission in May for a potential IPO, reportedly planned for late last year. Stock market volatility, however, prompted the company to shelve those plans. At its height last spring, Instacart was reportedly valued at $39 billion. After several cuts, the company has since slashed its internal valuation to around $10 billion, a nearly 75% drop, according to media reports from those familiar with Instacart’s finances.

The company has also faced increasing pressure over its gig-worker labor model. Earlier this year, the city of San Francisco announced that Instacart had agreed to pay $5.2 million to settle a case involving more than 5,000 workers who weren’t given health benefits or paid sick leave. A few months before that, Instacart was ordered to pay $45.6 million to settle a labor-related dispute filed by the city of San Diego in 2019.

Last month, Instacart said it was “winding down” in-store shopping operations for curbside pickup orders at select grocery chains in the coming months. The move, Instacart said, was prompted by changes in the omnichannel grocery model that caused some food retailers to shift to fulfilling their own orders.

Instacart declined to say how many retailers or locations are moving away from Instacart’s in-store shoppers. The company also declined to say how many Instacart shoppers would be laid off as a result.

For its part, Instacart has been investing in its advertising and marketing channels as its delivery business recalibrates.

Earlier this month, Instacart hired Tim Castelli as VP of global advertising sales as the company looks to bolster its digital marketing business.

“Instacart Ads is a critical part of our business and has grown significantly over the last several years,” the company said at the time. “In 2022, we expanded our advertising toolkit with new products for our brand partners, including shoppable video and display ad units, pages, pop-ups, self-service promotions and new measurement capabilities like sales lift testing.”

As part of its changeover, Heinen’s said its shoppers would receive free curbside pickup and that alcohol and catering would be available for delivery or curbside pickup at most stores.

Some Heinen’s customers applauded the move.

“Having Heinen’s employees choose the products is much more appealing, because they will care more about the quality,” one customer said in response to the announcement on Facebook.