Instacart Expands Online Food-Stamp Payments, Challenging Rivals

Instacart Inc. is increasing the number of stores where it accepts online payments for Supplemental Nutrition Assistance Program participants, moving the online grocery delivery giant into competition with Amazon.com Inc. and Walmart Inc.. for a growing pool of consumers using federal assistance to buy food online.

The San Francisco-based startup is partnering with three retailers, Publix Super Markets Inc., The Save Mart Companies and Golub Corp.’s Price Chopper/Market 32, to allow Electronic Benefits Transfer (EBT) payments in more than 1,500 additional U.S. stores. The expansion is about a 60% increase in availability for SNAP online purchasing through Instacart, which began in October with a partnership with ALDI.

Food-stamp recipients will be able to order same-day delivery or pickup through the Instacart website and mobile app in more than 4,000 stores across 38 states and Washington D.C.

“We recognize the opportunity we have to help make fresh food and pantry staples more accessible to communities by breaking down barriers to same-day grocery delivery and pickup,” said Instacart President Nilam Ganenthiran in a statement Thursday. The company is waiving delivery and pickup fees through June 16 on the first three orders for each SNAP customer with a valid EBT card.

Instacart’s move comes as the U.S. Department of Agriculture builds upon a pilot program to make it easier for food-stamp recipients to shop online that began in 2019 and ramped up during the Covid-19 pandemic. Since its launch, Walmart and Amazon have dominated availability through the federal government’s online pilot. With 22 million households receiving benefits, SNAP is the largest food assistance program in the U.S, according to agency data.

Instacart is the largest grocery delivery company in the U.S., according to Bloomberg Second Measure data. The coronavirus pandemic has driven a surge in demand for grocery deliveries from homebound customers with the startup now controlling 48% of market share as of February. The company has been eying an initial public offering this year and announced a $265 million funding round that lifted its value to $39 billion in March.

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