Instacart looked like a savior. Now the stores are not so safe.

But many supermarkets say they don’t make money through Instacart, largely because the delivery company usually charges them a commission of more than 10% of each order. Some of Instacart’s retail partners say the service has too much control over customer interactions and expects to take some of the growing money that food manufacturers spend on marketing. Everything that put the grocers in a connection, because the delivery continues to explode and becomes a necessity.

“We don’t think we’re making money from an Instacart order,” said Mark Skogen, CEO of Skogen’s Foodliner Inc., which operates more than 30 Festival Foods stores and began offering Instacart about a year ago.

Delivery remains expensive because his company pays Instacart a percentage of its online sales, Mr Skogen said. The grocer still works with Instacart because it allows for higher income, even if there is no profit.

Nilam Ganenthiran, president of Instacart, said in an email that the company’s services help grocers grow without spending years of labor and capital investment to build infrastructure.

“We do not compete with retailers,” said Mr Ganenthiran. “We do not operate from warehouses and we have not launched our own stores or mini-testimonials as other services that compete directly with the grocers.”

The Save A Lot chain joined Instacart this summer because the service was quick and easy to implement, said Chris Hooks, merchandising director at Midwest Grocery, which operates more than 1,000 stores. He said Save A Lot considers Instacart a way to attract existing and potential customers.

Instacart said it has added or expanded agreements with more than 150 U.S. and Canadian retailers this year, partnering with more than 500 companies, including Kroger. Co.

, Walmart Inc.,

Aldi Inc. and 7-Eleven Inc.

Like many of his colleagues, the delivery service struggled to meet the growing demand at the beginning of the pandemic, but said it has since lagged behind. Instacart said its orders have increased by 500% annually at certain times this year and that its workforce for most concert workers has doubled to 500,000.

The business boom has contributed to Instacart’s first profitable month in April since its inception in 2012. The company has raised nearly $ 500 million since March, valued at $ 17.7 billion. Instacart said it expects an initial public offering, but declined to comment on the timeline.

Over the years, Instacart has added services such as suggesting replacements for items in stock based on customer preferences and allowing consumers to communicate directly with Instacart buyers, Mr Ganenthiran said.

Instacart began delivering non-commercial items such as recipes and alcohol. The company is expanding a business that builds websites and provides technology support to retailers.

Instacart also works with manufacturers to promote and reduce products on its platform. Mark Griffin, President of B&R Stores Inc. from Nebraska, said it means retailers and Instacart pursue the same fund of money that brands spend on marketing.

“We compete with what we perceive to be a partner,” he said. When working with Instacart, B&R becomes part of a “whole laundry list” of retailers, rather than the local customer store, he said.

Mr Ganenthiran of Instacart said the advertising business gave consumers access to discounts, which would eventually encourage them to buy more from supermarkets. Instacart was built to protect retailers and help them gain market share online, he added.

When HEB LP partnered with Instacart in 2015, the Texas chain raised prices for products it sold through Instacart to help cover delivery-related taxes, people familiar with the talks said.

To maintain some control, others choose not to outsource their entire e-commerce business. Kroger, the largest grocer in the country, manages takeover orders with its own staff. The company also encourages customers to order delivery through its website – rather than Instacart – by offering digital coupons and fuel savings at Kroger gas stations for members of its loyalty program. Kroger executives described Instacart in a recent earnings call as an important partner, but said the grocer is always looking for delivery partners.

Retailers have several options at hand. DoorDash Inc.

and Uber Technologies Inc.

began delivering food this year while Target Body

Shipt Inc. continues to expand.

The Associated Food Stores, a Salt Lake City cooperative with more than 400 stores, said it was exploring the use of Instacart early next year. So far, it has used DoorDash, in part because of the reduced service commission rate of about 9 percent on orders charged to stores, said Thomas Horne, a senior e-commerce manager at the company. The Instacart rate is higher, he said, although the rate varies by merchant.

Instacart said it wants to give all supermarkets an advantage.

“It’s much more complicated to choose a perfect bunch of bananas or the best replacement for your favorite cookies than to deliver a burrito to someone,” said Mr Ganenthiran, adding that the company continues to invest to improve its operations.

Some supermarkets resist. Northeast Weis Markets chain Inc.

prefers to encourage customers to order online and pick them up in stores, said CEO Jonathan Weis. The grocer does not use Instacart, but relies on Shipt for delivery.

“They were a little expensive, in our opinion,” he said of Instacart.

Instacart could remain just one of many ways to shop online. Farhan Siddiqi, digital director at Koninklijke Ahold Delhaize NV, said customers prefer specific delivery services. The owner of the Giant and Stop & Shop chains uses Instacart in addition to the internal delivery services of Peapod and FreshDirect LLC, which they team up with a private equity firm to buy.

He added: “It’s a very complicated world.”

Write to Jaewon Kang at [email protected]