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In Minnesota, the Star Tribune reports that "Cub Foods is starting its own online pickup and delivery services, a sign they have become integral to the grocery shopping experience.

"Cub, the market leader in the Twin Cities grocery industry, since 2015 has relied on Instacart, a national leader in online ordering and delivery, to handle its e-commerce customers.

"The rise in such ordering during the pandemic led Cub executives to accelerate the company's plans to offer such services itself, said Chad Bersie, director of e-commerce at Cub."

The story notes that "While anyone will be able to shop via Cub's online platform, people who are enrolled in its customer loyalty program, called My Cub Rewards, will be able to get similar benefits shopping online as they would inside its stores.  That includes access to exclusive promotions, preloaded savings and digital coupons, and building up points that can be used for discounts at participating Holiday Stationstores."

While Instacart customers will still be able to order from Cub, they will not have access to those incentives and rewards.

According to the story, "Cub in June began offering home delivery from its liquor stores. It will now use the same company, Capstone Logistics of Brooklyn Park, to handle its food deliveries.  Capstone will use 300 independent contractors for deliveries from Cub's 79 grocery stores and 28 Wine & Spirits and Liquor locations throughout Minnesota. Delivery drivers will wear the Cub logo on their uniform for identification purposes."

KC's View:

I think we're going to see more of this, as retailers begin to understand that as e-grocery becomes a larger part of their businesses, they need to have some control over that part of the customer experience.

I was interested last week to see a press release from Farmstead - a tech startup we've written about here on MNB - that has branched out from being an e-commerce company to being a technology provider, providing what it calls an "end-to-end same-day e-commerce operations solution for grocers," helping them to "get a dark-store delivery operation up and running in just two weeks."

That's always been the challenge for retailers - even if they want to do things on their own, companies like Instacart have had the ability to get them into business quickly.  If Farmstead can live up to its promise, it'll put a dent in that proposition.

Here's what is going to get interesting:  How does Instacart respond to Cub's move, especially if it sees volume slipping away?  Does it respond as a competitor, and start using a variety of methods to bring back shoppers who have migrated to Cub's platform back to its own?  

The betting here is that it will … though this could backfire because it would vividly illustrate the degree to which Instacart is more threat than partner.