By: CLC Editorial Staff
Amazon doesn’t tiptoe into categories. It marches in, rewrites the rules, and dares everyone else to keep up. Now that grocery is firmly in its sights, the question isn’t if the industry feels the shake—it’s who gets knocked off balance first.
Instacart: The Most Vulnerable Player
Let’s be honest: Instacart has been riding high on convenience, but shoppers are hitting their breaking point.
- Tipping fatigue: Customers are tired of screens asking for 20%+ tips on top of inflated prices.
- Pricing perception: The math rarely feels worth it—between service fees, delivery charges, and markups, you end up paying restaurant-delivery prices for bananas and milk.
- Amazon’s edge: By bundling grocery into Prime, Amazon makes delivery feel cheap—even “free.” That’s a narrative Instacart can’t tell without blowing up its margins.
If consumers start thinking, “Why am I paying more for Instacart when Amazon just drops it off with my Prime order?”—that’s a dangerous place for Instacart to be.
Can Instacart Pivot?
Instacart knows the pressure is coming. That’s why it’s investing heavily in in-store capabilities—tech that helps grocers manage operations, optimize assortments, and improve the shopper experience inside the four walls. By becoming more of a technology partner than just a delivery app, Instacart is trying to future-proof itself.
But here’s the catch: pivoting from a consumer-facing marketplace to a B2B tech provider is no easy leap. Amazon and Walmart are building their own in-store ecosystems too, while regional grocers may not have the budgets to pay for Instacart’s services at scale. If Instacart can’t make the economics work on delivery, its ability to survive depends on how fast (and convincingly) it can reposition itself as infrastructure, not just convenience.
DoorDash: The Convenience King Still Has Room to Run
DoorDash, on the other hand, isn’t sweating quite as much. Its empire is built on immediacy. Craving pad thai at midnight? Need Advil, a Slurpee, and Doritos in 20 minutes? Amazon can’t touch that impulse mission (yet).
DoorDash also has an edge in restaurant delivery—something Amazon has dabbled in and abandoned before. As long as consumers equate DoorDash with “I want it now,” it has insulation from Amazon’s grocery push.
Walmart: The True Heavyweight Bout
If there’s one player Amazon actually respects in grocery, it’s Walmart. The world’s largest retailer already has scale, price leadership, and thousands of stores doubling as fulfillment hubs. For shoppers, Walmart+ and Prime are the two ecosystems competing for loyalty. For CPG brands, it’s a tug-of-war for retail media dollars.
Unlike Instacart, Walmart can go punch for punch with Amazon on price, selection, and speed. This is the real heavyweight fight.
Regional Grocers: Stuck in the Middle
Chains like Kroger, Publix, and Albertsons have strong local loyalty, but they don’t have the scale of Walmart or Amazon. Their advantage is fresh, regional, and community feel—things that don’t translate as easily into a “Prime-like” ecosystem.
The risk? If shoppers are trained to expect cheap or bundled delivery through Amazon, regional grocers may be forced to subsidize online orders to keep up—hurting margins they can’t afford to lose.
The Pricing Psychology War
The real battlefield here isn’t just logistics—it’s perception. If Amazon normalizes delivery as “free” (or close to it), suddenly everyone else looks overpriced. That forces competitors into ugly choices:
- Cut prices and eat into profits
- Pile on more perks to justify fees
- Or double down on differentiation (freshness, speed, local love)
It’s a classic Amazon play: change the definition of value until everyone else looks bad.
Retail Media: The Silent Land Grab
Behind the scenes, retail media is the crown jewel. Instacart, Kroger, and Walmart have built ad businesses that are now critical profit drivers. Amazon? It’s already the #3 digital ad platform globally. Add grocery into the mix, and it can dangle even more shopper data and closed-loop attribution in front of CPG brands.
That means ad dollars shift to Amazon—not just grocery sales. And for Instacart, losing ad revenue on top of losing shoppers is a one-two punch.
The Bottom Line
Amazon doesn’t need to “win” every grocery mission. It just needs to reset shopper expectations around price, convenience, and delivery. That alone puts Instacart in a tough spot, squeezes regional grocers, and forces even DoorDash and Walmart to stay sharp.
DoorDash still owns “I want it now.” Walmart still owns “I want it cheap and everywhere.” But Instacart? It risks becoming the middle-man nobody needs unless its in-store pivot can actually transform it into something more than a delivery app.
The varsity team just walked onto the court. It’s going to be a master class of business acumen and creativity to see who can actually stay in the game.