Bloomberg has a piece in which it writes that "while Instacart sales are still higher compared to pre-pandemic levels, its year-over-year sales growth and average sales per customer are declining. However, Instacart is continuing to see sales growth in some metro areas like Dallas, Philadelphia, and New York."
There are a number of reasons for the lower growth. Less demand for delivery in a post-pandemic world. More competition. Lower grocery spending overall. Even some retailer trepidation about Instacart's ownership of their customer data.
Bloomberg writes: "In light of Instacart’s reduced valuation, investors may be wondering if an Instacart IPO should be expected this year. According to Instacart CEO Fidji Simo, the new valuation does not affect their plans for an IPO, but the company is in 'no rush' to go public.
"Instacart is reportedly exploring new revenue streams through its self-service ad platform and its shoppable recipe partnerships with platforms like TikTok and Tasty. Last month, Instacart also launched the Instacart Platform, a suite of services for retailers that includes in-store smart carts, analytics tools, and nano-fulfillment centers that enable 15-minute delivery."
- KC's View:
Of course growth has slowed. How could it not?
The Instacart model saw enormous growth because of the pandemic and abject fear on the part of many retailers once Amazon bought Whole Foods. Well, the pandemic is (almost?) over, and it isn't like Amazon has turned Whole Foods into some sort of juggernaut.
So the moment has cooled off. For now. But I fully expect Instacart to continue to innovate and, if it can get away from its traditional approach of owning retailers' customer data, become an even bigger and more effective player.