Noelle Marian started work for Instacart in May 2019. She’s a store buyer, one of less than 10,000 Instacart part-time employees assigned to a specific store – in her case, a Mariano’s in Skokie, Illinois – picking produce from groceries on the shelves, packing them up and getting them ready for pick up.
Last year, she and her 15 fellow Instacart in-store buyers became the only unionized Instacart workers when they voted to join the United Food and Commercial Workers International Union, which represents 835,000 employees. grocery store in the United States and Canada. Since the pandemic shut down her fitness business last spring, Marian has been working nearly 30 hours a week.
Last week, Marian learned she would lose her job. Instacart said it was laying off 1,900 part-time in-store shoppers, including unionized workers at the Mariano. The move has been widely condemned as anti-union action by an app-based company that takes advantage of its workers.
But the changes in Skokie and elsewhere reflect a larger upheaval in the grocery industry, as the pandemic disrupts the way people buy and eat. Large grocery chains like Kroger, Albertsons, Aldi, as well as grocery divisions of big box stores like Walmart and Target, are increasingly relying on their own employees to fulfill a multitude of online orders. This has created friction with former partners including Instacart.
“Retailers who have always had a laissez-faire attitude to grocery e-commerce have realized that this is a potentially sustainable business and that they indulge too much in app-based markets,” says Sylvain Perrier, CEO and President of Mercatus Technologies, which creates software for food retailers. “Now they’re trying to get their strategy back.”
Instacart denies that he is anti-union. In a statement, a company spokesperson said the layoffs resulted from some grocers opting to use their own employees to do their shopping. Instacart’s much larger army of independent contractors will continue to work in many of the affected stores, the spokesperson said. It’s unclear how the entrepreneurial workforce has changed during the pandemic. The company said in April that it had 500,000 contract customers and planned to add another 250,000 in the following two months. Today, the company says it still has 500,000 entrepreneurs.
A spokesperson for Kroger, owner of Mariano’s, said, “The Kroger family of companies were not involved in Instacart’s decision to suspend its in-store operating model.”
For years, the delivery of groceries was the source of busy households in highly urbanized areas. Now, a Mercatus analysis reveals that online grocery sales in the United States have more than doubled since February 2020, reaching 10.2% of all grocery sales. Thirty percent of all U.S. households ordered a grocery item online for pickup or delivery in November, up from 12.5 percent in August 2019, according to retail analytics firm Brick Meets Click. Retailers report that the flow of online orders has been declining since the peak of the summer, but they expect the new eating behaviors to persist long after the pandemic.
When Covid hit the United States last winter, grocers have struggled to keep pace with this growing demand for deliveries. Companies like Instacart have entered the breach. Now grocers are rearranging their priorities, investing money in technology for online ordering, smartphone apps and getting food to customers’ doors.
It is expensive and intense work. The CEO and chairman of Albertsons, America’s second-largest grocery chain, said this month that 30% of the company’s capital spending is now on technology. Kroger has seen its digital sales nearly double in each quarter of 2020, compared to the previous quarter, and it is spending on its “drive up and go” pickup options.