Shares of Maplebear (NASDAQ:CART), more commonly known as Instacart, have turned defensive on Friday and slid to their lowest level since May on the heels of Amazon’s (AMZN) new partnership with Winn Dixie.
The e-commerce giant, which is rapidly expanding its grocery delivery business with a goal of reaching more than 4,000 cities by the end of this year, announced a new partnership with Winn Dixie to offer grocery delivery to customers in the greater Jacksonville and Orlando metropolitan areas. Roughly 36 Winn-Dixie stores operate across the two cities, and the service is expected to scale to cover the 16% of Americans who shop there
The move by Amazon (AMZN) – the first time the company has acted as a third-party intermediary to a grocery chain — is viewed as headwind to rivals like Instacart (NASDAQ:CART), Uber Eats (UBER), and DoorDash (DASH).
For Instacart (NASDAQ:CART) the threat from Amazon (AMZN) is more acute, represented by the 15% reversal in the share price after Amazon (AMZN) announced plans in mid-August to expand their own same-day delivery service to fresh groceries ordered through Amazon’s marketplace.
At the Goldman Sachs Communacopia + Technology Conference last week, CEO Chris Rogers sought to downplay the competitive threat from Amazon.
“We feel very differentiated because of our strength in large baskets…a few thousand SKUs at Amazon relative to 17 million SKUs now on Instacart. And we know that matters because 70% of our customers have at least one dietary preference, and they trust us because of our speed and quality,” Rogers said.
Unfortunately, investors feel differently, driving Instacart (CART) shares down more than 7% in the wake of Amazon’s (AMZN) latest news, the stock’s steepest decline since August 13-14.