Dive Brief:

• C&S Wholesale Grocers will offer e-commerce services, including same-day delivery, to more than 3,000 independent operators it supplies, according to a press release.
• C&S and Instacart will work with interested grocers to bring them onto the e-commerce provider's marketplace. Once listed, customers can browse store assortments, place their order and an Instacart shopper will purchase and deliver the products.
• Instacart now provides e-commerce services to more than 350 chains and local retailers and has added numerous additional services during the pandemic, including contactless delivery and expanded order-ahead options.

Dive Insight:

Hundreds of independent grocers that previously dabbled in online grocery or disregarded it altogether are now finding that they have to offer digital shopping as interest has swelled during the pandemic.

Sources have told sister publication Grocery Dive that local grocers have been lining up with service providers. In March, Mercato CEO Bobby Brannigan told Grocery Dive his company was bringing as many as a dozen grocers online in a day and had "hundreds" queued up. To handle the elevated demand, Mercato was utilizing an overseas workforce to onboard companies.

Diana Medina, director of e-commerce solutions at Inmar Intelligence, recently told Grocery Dive the firm sped up the launch of its service platform targeting independent grocers.

"When we saw the tremendous demand we knew we needed to get in front of customers," she said.

C&S Wholesale Grocers sees this opportunity. Since 2017, the company has offered online shopping to its independent store customers through Ithaca, New York-based Rosie. With Instacart, the wholesaler and its partner stores get access to a well-known and widely used platform as well as significant resources. Instacart handles e-commerce end-to-end and has more than doubled its contractor workforce over the past few months.

According to Brick Meets Click and Mercatus, online grocery sales totaled $6.6 billion in May, up from $5.3 billion in April. This demand has meant a windfall for service providers and a dramatic operational shift for retailers nationwide. But the long-term benefits for small-size grocers are questionable, as online orders are more expensive to fill and independents don't have the name recognition and operational efficiency that large chains like Walmart, Kroger and Albertsons do.

Instacart, which expertly capitalized on e-commerce anxiety following Amazon's acquisition of Whole Foods three years ago, has signed on millions of new customers as well as a few new grocery chains, including Bi-Lo. The company reported last month that its delivery times had stabilized and that its average basket size has grown 35%.