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CHICAGO/SAN FRANCISCO - Food delivery platform Grubhub is expanding its offerings by partnering with grocery technology company Instacart (NASDAQ:CART) to provide customers access to more than a thousand grocery retailers across the United States. Instacart, which has demonstrated impressive financial performance with a 74.84% gross profit margin and revenue growth of 10.47% over the last twelve months, according to InvestingPro data, continues to strengthen its market position through strategic partnerships.
The integration, which began rolling out Tuesday, allows Grubhub users to order groceries directly through the company’s app and website, with orders fulfilled and delivered by Instacart shoppers. The service is expected to be available nationwide by the end of October wherever Instacart’s grocery retail network operates.
Customers can access the new grocery options by tapping the Grocery icon in the Grubhub app, selecting a nearby store, and placing their order while tracking delivery in real time. The companies also plan to add select pharmacy retailers to the platform in the coming months.
"This partnership marks an exciting step forward for Grubhub," said Howard Migdal, CEO of Grubhub, in a press release statement. "With nearly 20 million customers and access to over 415,000 restaurants, we’re now expanding our platform to include groceries powered by Instacart." Based on InvestingPro analysis, Instacart is currently trading below its Fair Value, suggesting potential upside for investors interested in the growing food delivery sector.
To promote the new service, Grubhub+ members will receive free standard delivery on eligible grocery orders of $25 or more from participating retailers. All customers can receive 30% off up to three grocery orders of $75 or more during the next three months, according to the announcement.
Grubhub, part of Wonder Group, operates in more than 4,000 U.S. cities with over 415,000 merchant partners. Instacart partners with approximately 1,800 retail banners across nearly 100,000 North American stores.
Ryan Hamburger, Vice President of Commercial Partnerships at Instacart, said the partnership brings "the Instacart grocery experience directly to millions of Grubhub customers" while helping Grubhub expand its platform offerings.
In other recent news, Instacart has been actively expanding its technological capabilities and partnerships. Several independent grocery chains, including Big Bunny Market in Massachusetts and Stewart’s Marketplace in Utah, have adopted Instacart’s AI-powered Caper Carts to enhance the shopping experience. This technology allows customers to track spending and check out directly from their shopping carts. Additionally, Instacart has broadened its business features for retailers using its Storefront and Storefront Pro e-commerce solutions, with Woodman’s Markets already implementing these capabilities.
In a move to integrate retail media solutions, Instacart has launched a collaboration with TikTok, enabling consumer packaged goods advertisers to leverage Instacart’s retail data within TikTok Ads Manager. This makes Instacart the first retail media network to offer such end-to-end capabilities on TikTok. Furthermore, Instacart has partnered with United Airlines, providing United MileagePlus members with delivery perks, including waived delivery fees on grocery orders linked to their travel. On the financial front, Guggenheim initiated coverage on Instacart with a Neutral rating, citing slower growth compared to peers and competitive pressures as factors.
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