What happened
Instacart is making its first notable course correction since sale chatter surfaced, saying it will wind down its Caper Cart program and coordinate with retailers to remove every cart from stores before the first quarter ends next year. Each cart is equipped with a built-in tablet along with cameras and weight sensors to log items and process checkout, and they also give brands a way to run digital ads.
The cart tech came from Caper AI, acquired for $350 million in October 2021. After the deal, partners including Kroger Co., Wakefern Food Corp., and Aldi offered the carts across more than 100 cities worldwide, but expansion has been constrained in part by the cost to build out the technology.
An Instacart representative said the decision has been in the works for months and predates last week's sale reports from Bloomberg and the Information. Separately on Monday, reports indicated Instacart was in advanced negotiations to be acquired by DoorDash Inc., a transaction that could value the company at about $17 billion. Spokespeople for DoorDash and Instacart did not provide immediate comment to Bloomberg News, and the Wall Street Journal had earlier reported on the talks.
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Why Instacart is winding it down
Instacart pointed to slow retailer uptake relative to the investment required. "Over the past several months, we've been evaluating Caper's progress and the investment required to scale the business," the company said. "Retailers and brands today are balancing a number of competing priorities, and we're seeing them prioritize investments in solutions that can modernize stores at scale. While Caper is a great product, the business reality is that retailer adoption has not scaled quickly enough to justify our continued investment."
The company projects recording pretax charges of roughly $55 million to $80 million as it sunsets Caper Carts, with the bulk hitting in the fourth quarter and running through the second quarter of 2027. The total covers employee termination expenses and write-downs of long-lived assets associated with running the carts. Some Caper employees will move to other roles, while an undisclosed number of positions will be eliminated.
Where the money goes next
Instacart plans to put savings toward other in-store tools. That includes smart price tags and computer vision systems that help grocers track shelf inventory. "As we look ahead and work closely with retail and brand partners, the next phase of our in-store strategy will be focused on intelligence and software," the company said. "We believe our strengths in software, data, and AI give us a greater opportunity to help retailers and brands understand what's actually happening on store shelves and take action on that information."
The bottom line: hardware takes capital and long timelines, while software can scale faster. If Instacart leans into data and AI inside the store, your read-through is a shift toward higher-margin, asset-light growth - and a potential setup change if a DoorDash deal comes together.
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