Target will wind down Instacart partnership as focuses on Shipt acquisition

It doesn't come as a huge surprise, but Target is in fact going to wind down its partnership with delivery firm Instacart in the wake of its acquisition of rival Shipt.

Eddie Baeb, a company spokesman, confirmed the retailer's plans to cut ties with Instacart, but added there is no timeline yet for when delivery via Instacart from Target stores in the three markets where it offered the service -- the Twin Cities, Chicago, and San Francisco -- will end.

"We want to offer a great experience through Shipt," he said. "So obviously that's where we're going to focus going forward."

When Target first announced last month its $550 million deal to buy Shipt, Target executives were not definitive then about what would happen with its Instacart partnership. But the writing was on the wall.

Instacart declined to comment.

The loss of Target as a retail partner should not be a big blow in and of itself to Instacart since it was only delivering from the retailer in three of more than 150 markets where its same-day delivery services are in operation.

A source familiar with the matter said that Target's Instacart business in those three markets account for less than 1 percent of Instacart's entire volume. Other major Instacart partners include Costco, Whole Foods, Petco and CVS as well as a number of regional grocery chains such as Cub Foods.

The bigger question, of course, is how Shipt's rapid expansion with the help of Target's resources will impact Instacart's overall business. And while some retailers such as Costco are part of both platforms, it remains to be seen whether that will continue to be the case.

Target will begin offering same-day delivery of groceries, household essentials, home goods and electronics through Shipt in the coming months. It plans to have the service up and running from half of its 1,800 stores by this summer and from most of its stores by next winter.