Why Instacart (CART) Shares Are Down Today

Instacart Faces New Competition

Instacart (NASDAQ:CART), the online grocery delivery service, saw its stock price drop by 3.3% during the afternoon trading session. This decline followed news that Kroger, a major grocery retailer, has expanded its delivery services through partnerships with Uber Eats and Postmates. With this move, Kroger now offers delivery from nearly 2,700 stores nationwide, including brands such as Ralphs and Fred Meyer. As a result, Kroger's full product lineup is now available on popular on-demand delivery platforms, putting it in direct competition with Instacart. Investors reacted with concern, fearing that this convenient alternative could erode Instacart’s share of the market, sending the stock to its lowest point in almost two months.

Market reactions to news can sometimes be exaggerated, and significant price drops may create opportunities to purchase strong companies at a discount. Is this a good moment to consider buying Instacart shares?

Understanding the Market’s Response

Instacart’s stock is known for its volatility, having experienced 18 swings of more than 5% over the past year. In this context, today’s decline suggests that investors view the latest news as significant, though not enough to fundamentally alter their outlook on the company.

The last notable movement occurred 24 days ago, when Instacart’s shares fell by 2.2% after the company announced the end of a controversial pricing strategy and agreed to pay $60 million to settle with the Federal Trade Commission (FTC).

This pricing strategy relied on artificial intelligence to display different prices for the same product to different customers. The practice was discontinued after consumer advocacy groups raised concerns, prompting an FTC investigation. The $60 million settlement addressed claims that Instacart misled customers by advertising free deliveries while still imposing mandatory service fees, and by enrolling users in its paid membership program without clear consent. These incidents have sparked questions about Instacart’s business ethics and customer trust.

Since the start of the year, Instacart’s stock has dropped 10.3%. At $39.40 per share, it currently trades 25.9% below its 52-week high of $53.15, reached in February 2025. Investors who purchased $1,000 of Instacart stock at its IPO in September 2023 would now see their investment grow to $1,169.

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