Report: Whole Foods, Instacart to part ways

Shortly after Instacart lowered its fees nationwide – making Whole Foods deliveries via Amazon Prime Now costlier – the Wall Street Journal is reporting Whole Foods and Instacart are calling it quits.

Austin, Texas-based Whole Foods Market Inc. was one of the first retailers to sign on with San Francisco-based Instacart, in the company’s first pilots in Austin and San Francisco in 2014. Whole Foods also invested in the company in 2016.

The WSJ is reporting Instacart is ceasing deliveries from 76 Whole Foods locations in February, and “the San Francisco-based company said around 240 employees would be laid off as a result.”

Instacart reportedly plans to transfer most of the 1,400 employees who handle Whole Foods orders to other stores.

Instacart has raised several rounds of funding, and expanded services in Whole Foods competitors ever since Seattle-based Amazon purchased Whole Foods last year. Most notably, Phoenix-based Sprouts Farmers Market switched from Amazon Prime Now to Instacart as its delivery provider starting in 2017.

Reports hinted at the dissolution of the delivery agreement, with GeekWire noting Whole Foods removing Instacart branding back in October, and Bloomberg reporting on new shoppers in San Francisco-area stores.

In late November, Instacart lowered its fees, making it cheaper to order from Whole Foods via Instacart than Amazon’s Prime Now.