U.S. consumers are voting with their feet and their fingers, heading to club retailers for perceived value amid the affordability debate. In its first quarter results, Instacart reported consumers are focused on affordability and value.
CEO Chris Rogers told Reuters that club retailers have become increasingly popular because of heavy discounts but other retailers offering value are growing faster.
Food and beverage expert Amrita Bhasin told The Food Institute that there’s no way that bodegas, smaller chains, or mom-and-pop businesses can compete with club retailers on price, but they still can attract consumers.
“These smaller businesses will continue to win by having ethnic, unique or specialty, local products that the average club chain retailer won’t offer. Moreover, smaller businesses like mom-and-pop grocery stores can offer liquidation or bargain pricing on one time or one-off deals. It is less feasible for a club retailer to do this,” Bhasin, co-founder and CEO of Sotira, said.
Instacart may be seeing this gravitation toward club retailers on its platform simply because it’s easy to order online, and smaller operations may not have the technical access, Bhasin said. That doesn’t mean, however, that smaller operators are losing ground.
“While customers may order from smaller businesses less on Instacart, they will still have a need to purchase specialty products that large chains won’t offer,” she said.
The war in Iran sent oil prices surging, raising costs across the board, sparking new inflation fears, and heightening the affordability debate. The April inflation report showed overall prices up 3.8% compared to last year, well above the 2% target set by the Federal Reserve Bank.
Placer.ai reported increases in foot traffic at the likes of Costco, BJ’s, and Sam’s Club as early as mid-2024.
Instacart gained popularity during the pandemic, which turned monthly $25 million losses for the company in 2019 to a $10 million profit by April 2020. The current quarterly report put total revenue for the first quarter of 2026 at more than $1 billion, up 14% from the same quarter last year, and net income at $144 million, up 36%.
An Instacart Economic Impact Report released late last year indicated that the company had penetrated 98% of U.S. households.
The Food Institute Podcast
At SIAL Canada 2026 in Montreal, Food Institute VP of Content and Insights Chris Campbell sat down with Mathieu Brisson, Global Sales Lead at Prestige Maple, to discuss how the company is transforming maple products for a rapidly evolving global food and beverage market.
