Instacart’s grocery moves are not over (ACI)
Two weeks ago, Instacart made public that its plans for an IPO were being pushed off into 2022 or later. Its latest fundraising round in January valued the company at $39B. The new CEO, Fidji Simo, was said to want to strengthen the company’s service offerings for grocery retailers beyond delivery. In the last month, Instacart has acquired FoodStorm and Caper AI. FoodStorm is a catering software firm. FoodStorm will be integrated to offer end-to-end food ordering for retailers, bringing a high margin in-store offering to their digital offering. Caper AI is a smart cart and technology platform. Caper AI improves the in-store offering for retailers, deepening the relationship between Instacart and its retail customers. The new offerings are designed to reaccelerate its growth rate after it moderated to about 10% in the first half of the year.
Instacart has been active in other ways in recent months. The company announced new virtual convenience experiences with Kroger, Ahold Delhaize U.S., and Publix to enable 30-minute delivery. Instacart announced new partnerships with Dollar Tree and Grocery Outlet. EBT SNAP payments were expanded to more than 30 retailers, and alcohol delivery was expanded in several states to capture 75% of U.S. households. Instacart launched a new media campaign two weeks ago focusing on the power of meals to bring people together.
Instacart sees more competition in grocery delivery from established companies like Uber, Amazon Fresh, and DoorDash and startups like Gorillas and GoPuff. It is also seeing more competition in advertising. Two weeks ago, Albertsons announced the launch of its retail media network, joining Walmart and Kroger. Instacart’s recent hiring of President Carolyn Everson and CEO Fidji Simo from Facebook is evidence of the importance the company is putting on advertising. The competitive space in grocery e-commerce is in flux, and more deals should be expected when growth slows.
Canadian beer sales (TAP)
Total beer volumes in Canada increased 0.7% in October YOY, accelerating the 2.6% decrease in September. Domestic beer volumes increased 1.8%, while imported beer volumes decreased 6.3%, as seen in the chart below. 85% of the beer consumed in Canada is made in Canada. Exports declined 5.9% in September, decelerating from the 5.5% growth in August (exports are reported on a month lag).
Return to the office (KR)
According to Kastle Office Systems, the average office occupancy of the top ten cities in the U.S. was 32.5% for a holiday-shortened week ended November 24, down 630bps sequentially, as seen in the chart below. The Texas cities had the largest drop but also the highest overall occupancy levels. The return to the office will determine how permanent the food consumption shift is from on-premise to off-premise. The return so far has been at a modest pace, and last week was thrown off due to Thanksgiving.
