'Every day is a new Black Friday for us': Instacart president on grappling with a surge in demand during the coronavirus pandemic

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'Every day is a new Black Friday for us': Instacart president on grappling with a surge in demand during the coronavirus pandemic
BOSTON, MA - MAY 28: Owen Amsler, an Instacart shift captain, shops for a customer in the Whole Foods Market in Boston's South End on May 28. 2015. A company called Instacart sends people into stores like Whole Foods to fulfill grocery delivery orders from other people. (Photo by Lane Turner/The Boston Globe via Getty Images)

Lane Turner/The Boston Globe via Getty Images

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Demand for online grocery delivery has spiked in recent weeks amid coronavirus lockdowns.

  • Grocery delivery company Instacart has been experiencing a surge in demand in recent weeks as more cities go on lockdown and shoppers order groceries from home.
  • In an interview with a Credit Suisse food analyst, the president of the company said that demand in the past two to four weeks had surpassed its growth forecasts for the next two to four years.
  • "This is well beyond Black Friday," he said. "Every day is a new Black Friday for us."
  • Moreover, he said in the wake of coronavirus, we will see a permanent change in how consumers shop for groceries and more will be done online in the future.
  • Visit Business Insider's homepage for more stories.

Consumers across the US are scrambling to find grocery delivery slots as the coronavirus lockdown continues to keep people at home.

Companies offering grocery delivery services have experienced a massive spike in demand in recent weeks. Instacart, a delivery company that pairs customers with personal shoppers who deliver groceries to their homes, is among those that have been most impacted.

In an interview with Credit Suisse food retail analyst Judah Frommer on Tuesday afternoon, Instacart president Nilam Ganenthiran discussed the past few weeks at the company.

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"This is well beyond Black Friday," he said, comparing the surge in demand to one of the retail sector's busiest shopping days of the year. "Every day is a new Black Friday for us."

Ganenthiran explained that in the past two to four weeks, Instacart has seen more growth take place than it was forecasting for the next two to four years.

"Customers are coming online in droves," he said.

Before the coronavirus outbreak hit the US, only around 5% of total grocery spend came from online orders. Adobe analysts recently estimated that online grocery spend now represents 8% of e-commerce sales overall.

Ganenthiran said that basket sizes are also on an upward trajectory, indicating that it isn't just shoppers panicking and stocking up anymore but rather that more people are fully transitioning to doing all their grocery shopping online.

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And while in the past, Instacart has been favored for fresh items, the company is seeing increasing demand for center store items such as packaged food, beverages, or frozen goods, he said.

"Clearly, people are buying the whole store on Instacart now," he added.

To cope with the surge in the demand, the company has been adding new "shoppers" at a rapid rate. The so-called shoppers are the contract workers that Instacart relies on to pick out and transport items to customers.

Instacart has had a troubled relationship with its shoppers. Last week, a group of shoppers went on strike demanding provisions like hazard pay and safety equipment as they face risks from the coronavirus.

Over the next three months, it is planning to bring 300,000 new shoppers on board.

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But Ganenthiran doesn't believe that this surge in demand will drop off entirely after the pandemic has passed. Instead, he believes that we will see a permanent change in how US shoppers buy their groceries.

"Awareness wasn't there across the US," he said, referring to the days before the coronavirus outbreak, "and the bulk of the country didn't know that a service like ours existed.

"That has changed... customers know that for the times that they need it, a service like ours exists," he said.

He's anticipating that once the pandemic passes every grocery store across the US will have to offer grocery delivery and pickup services if it wants to remain competitive, which puts Instacart, which is offering stores these services, in a very favorable position.

"The days of a grocer not offering e-commerce are probably behind us," he said. "There are folks that would never have thought about buying online who are now habituated to it."

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If you are an Instacart shopper and have a story to share, please contact this reporter via encrypted messaging app Signal at +1 (646) 768-4716 using a non-work phone, by email to mhanbury@businessinsider.com, or Twitter DM at @MarySHanbury.

Do you have a personal experience with the coronavirus you'd like to share? Or a tip on how your town or community is handling the pandemic? Please email covidtips@businessinsider.com and tell us your story.

And get the latest coronavirus analysis and research from Business Insider Intelligence on how COVID-19 is impacting businesses.

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