Using Instacart's platform, customers can have items from any Walmart department delivered in as little as an hour.
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In July, Amazon founder and CEO Jeff Bezos appeared before the U.S. House of Representatives judiciary committee and, during his testimony, he said that the company is still clawing and scratching to keep up with some of the biggest Big Boxes—and it's keeping an eye on some of the new kids, too.

"Every day, Amazon competes against large, established players like Target, Costco, Kroger, and, of course, Walmart—a company more than twice Amazon’s size," he said. "And customers are increasingly flocking to services invented by other stores that Amazon still can’t match at the scale of other large companies, like curbside pickup and in-store returns [...] We also face new competition from the likes of Shopify and Instacart—companies that enable traditionally physical stores to put up a full online store almost instantaneously and to deliver products directly to customers in new and innovative ways—and a growing list of omnichannel business models."

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Credit: ANDREW CABALLERO-REYNOLDS / Contributor/Getty Images

Bezos probably sat up a little straighter in his chair this week when he read that Walmart has partnered with Instacart, and they're testing out same-day delivery in four U.S. cities.

“Today, we welcomed Walmart to the Instacart marketplace for the first time in the U.S. Instacart now delivers from Walmart locations in three California markets—Los Angeles, San Francisco and San Diego—as well as Tulsa, Oklahoma,” an Instacart spokesperson told CNBC. "The new partnership brings thousands of items—from groceries, alcohol and pantry staples to home decor and improvement, personal care, electronics and more—at everyday low prices from Walmart stores to customers’ doors in as fast as an hour.”

As that spokesperson said, these four markets mark the first U.S. collaboration between Walmart and Instacart. Last August, Walmart and Instacart provided on-demand grocery delivery—which could range between one hour and five days, depending on the customer's preferred delivery time—from around 200 Walmart locations in Canada. (Instacart does currently deliver from Walmart-owned Sam's Club though.)

A Walmart spokesperson told Supermarket News that Walmart currently offers delivery from 3,000 U.S. stores, which can reach almost two-thirds of all households in the United States. As Bezos noted during his testimony, Walmart saw significant sales growth even before the coronavirus pandemic, with online orders surging 74 percent during the first quarter of this year.

Instacart has also seen increased demand this year. Before the pandemic began, the company had more than 140,000 full-service and in-store shoppers, but has more than tripled its "shopper community" in the months since. After two massive hiring drives, it now has more than 500,000 shoppers. The company also says that its order volume has increased by more than 500 percent compared to this time last year, while the average customer's order has increased by 35 percent.

Some analysts believe that this health crisis could permanently change the way we shop for groceries, even suggesting that some retailers could ultimately opt for all-online orders or offer only curbside pickup, instead of allowing shoppers inside the store at all.