As Instacart builds support for its plan to combine with DoorDash, the grocery e-commerce company is positioning the proposed $17 billion transaction as a bulwark for conventional retailers against mounting pressure from Walmart and Amazon.
The steps those retailers have taken in recent years to strengthen their grocery businesses have reshaped the industry so profoundly that Instacart concluded it needs the scale it would gain by merging with DoorDash, said Ryan Hamburger, Instacart’s chief commercial officer.
“The competition is intensifying in grocery, and it’s not intensifying because of marketplaces like Instacart or DoorDash. It’s intensifying because of the investments that Amazon and Walmart have been making in the space,” Hamburger said in an interview.
Hamburger portrayed the planned merger as a way to ensure that traditional grocers remain viable as Walmart and Amazon ratchet up their efforts to grab market share. Data shows that grocers that lose foot traffic to e-commerce services are often ceding those customers to Amazon or Walmart, not Instacart and DoorDash, he said.
“If we are not able to combine forces, we’ll still do what we’re doing,” Hamburger said. “We will still be a solid business. But those two giants are just going to continue to chip away at grocers across the U.S., and it’s actually going to reduce competition further.”
Multiple retailers Instacart partners with have declared their support for the merger, according to Hamburger. Those include Minnesota-based supermarket chain Coborn’s and The Save Mart Companies, which runs stores in California, Nevada, Oregon and Washington.
“We’re encouraged by what Instacart’s potential partnership with DoorDash could mean for grocers like us, with more resources and capabilities to help us grow and serve our communities,” Josh Wing, vice president of IT at Coborn’s, said in a statement provided by Instacart.
Instacart intends to press ahead with improvements to its enterprise and marketplace business sectors while it awaits regulatory approval for the merger, which isn’t expected to be finalized until late 2027 at the earliest, according to Hamburger.
“The major e-commerce giants that are out there [are] innovating every day,” he said. “They are doing new things each and every day to attract customers into their four walls and to attract customers to their e-commerce properties. And so we have to be on the leading edge of innovation between now and deal close.”
