In recent years, the US grocery industry has witnessed the development of several new technologies with potential to transform how stores operate and interact with consumers. The COVID-19 pandemic rapidly increased the adoption of these new technologies as the industry simultaneously experienced a surge in demand and unprecedented operational challenges. Perhaps the most significant innovation in how grocery stores operate has been the advent of third-party delivery platforms led by Instacart. Due to both the rapid expansion of Instacart and the potential for policymakers to enact regulatory changes at the local, state, or national level (possibly restricting or impairing the operations of grocery delivery platforms), it is crucial to understand how Instacart affects grocery workers and the overall grocery industry.

Instacart retained NERA Associate Director Dr. Robert Kulick to prepare a study that uses a series of rigorous statistical models to evaluate the relationship between Instacart adoption and economic outcomes in the US retail grocery industry. Specifically, it examines three primary questions: (1) whether the positive relationship between Instacart adoption and economic growth in the grocery industry found in previous research for four states extends to all 50 states; (2) whether the surge in Instacart usage associated with the COVID-19 pandemic led directly to increased grocery employment and output; and (3) whether Instacart has had any impact on grocery workers’ wages.

The statistical analysis presents strong evidence of a direct causal relationship between Instacart adoption and economic growth in the US grocery industry. The results show that the previously documented “Instacart Effect” is a national phenomenon, significantly increasing grocery employment and output within each major US region. Specifically:

• By the end of 2019, prior to the outbreak of COVID-19, Instacart was responsible for creating approximately 116,000 jobs in the US grocery industry and for increasing grocery revenue by $2.9 billion.
  
• Instacart accounted for approximately 70% of pre-pandemic net grocery job creation from 2013 to 2019.
• During the pandemic, Instacart was responsible for creating approximately 70,000 additional jobs in the US grocery industry and further annualized revenue growth of $3.5 billion. To date, Instacart has cumulatively created approximately 186,000 total jobs in the US grocery industry and increased total annual grocery revenue by $6.4 billion.
• US grocery employment surged during the pandemic, and approximately 92% of net grocery job creation associated with COVID-19 was attributable to Instacart.
• During the pandemic, Instacart increased average weekly wages for grocery workers by approximately $22 in markets served by Instacart.
• The consistency of the results across models and estimation strategies strongly supports a causal interpretation of the findings.

SUPPLEMENTAL APPENDICES

These appendices present the results of additional research building on the 2021 NERA white paper “The Economic Impact of Instacart on the U.S. Retail Grocery Industry Before and During the COVID-19 Pandemic.” Specifically, the analysis presented here provides economic impact estimates through Q1 2023 using an updated modeling strategy to investigate Instacart's economic impact on the US grocery industry at the national and state levels. The results show that Instacart has significantly increased grocery employment (by over 231,000 jobs) and output (by approximately $8 billion) nationally and in each US state for which data are available, creating significant economic benefits for local economies. In addition, the first supplemental appendix includes further analysis showing that the economic effects attributable to Instacart have disproportionately benefitted small- and medium-sized businesses (SMBs). The second supplemental appendix includes further analysis showing that the job creation attributable to Instacart has disproportionately benefitted seniors and non-college educated workers.