Instacart to build fulfillment centers near supermarkets

Grocery delivery firm’s warehouses would hold 10,000 to 50,000 items

Instacart CEO Apoorva Mehta (Getty)
Instacart CEO Apoorva Mehta (Getty)

Instacart is the latest company seeking to cash in on the industrial real estate boom, making plans to build its own fulfillment centers for supermarkets.

The grocery delivery company will begin developing an undetermined number of fulfillment centers over the next year, according to the Wall Street Journal. The centers would be able to hold between 10,000 and 50,000 items.

Instacart plans to use robots to retrieve items in the fulfillment centers and employees to pack and deliver them. It’s unclear how much Instacart is planning on spending.

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The company saw business surge during the pandemic, as consumers turned to online ordering to avoid going to grocery stores. Shoppers are beginning to return in-person, however, leading Instacart to adjust its strategy. Fulfilment centers offer the possibility of speeding up orders — a necessity when it comes to groceries — and cutting costs.

Instacart raised almost $700 million in 2020 and is valued at $39 billion. The company has plans to go public.

Warehouses have been one of the hottest commodities in real estate as e-commerce giants and smaller companies alike look to cut costs and accelerate deliveries. From January through May, first-year base rents on leases of at least a year grew almost 10 percent, with larger warehouses seeing even sharper increases.

[WSJ] — Holden Walter-Warner