Hello Omni Talk Fans!
Some weeks the retail news trickles in. This week? It came in by the truckload. Or, should I say, by the Dasher.
And boy, did we have some BIG headlines to unpack.
This week, I welcomed Kelly Carey, Senior Director at the A&M Consumer and Retail Group, for her first solo guest-host appearance on the Fast Five. And what a week to go solo!
We’re talking DoorDash’s $17 BILLION Instacart grab, the potential death of the smart cart, Starbucks’ comeback, Walmart+ crossing another border, and Andy Jassy telling Wall Street it’s sleeping on Amazon’s retail business.
And Kelly and I? Well, let’s just say we didn’t see eye to eye on everything.
Here’s what we covered, sponsored by the A&M Consumer and Retail Group, Mirakl, Ocampo Capital, Quorso, Manhattan Associates, and SmartScout:
DoorDash Bags Instacart For $17 Billion. But Does The Deal Even Need To Close?
DoorDash has agreed to acquire Instacart for approximately $17 billion, bringing together two of the biggest names in restaurant and grocery delivery. The deal isn’t expected to close until late 2027 or potentially the first half of 2028, and there’s plenty of regulatory scrutiny to get through before then. So, naturally, I had one BIG question. Does DoorDash actually need this deal to close to come out ahead? (Source)
Kelly made a compelling case for the acquisition. DoorDash gets access to Instacart’s grocery relationships, retail media capabilities, and a completely different type of shopper. But I took things in a slightly more Machiavellian direction. What if simply announcing the deal puts Instacart’s retailer relationships at risk, weakens a competitor, and forces the entire grocery delivery industry to rethink its partnerships? Kelly called it an ultimate chess move, particularly with Uber caught in the middle. And that’s what makes this so fascinating. Whether the deal closes or not, DoorDash may have already changed the game.
Instacart Checks Out Of Caper Carts. Is The Smart Cart Finally Dead?
And speaking of Instacart, the company is also pulling the plug on its Caper Cart business, just five years after spending $350 million to acquire Caper AI. The reason? Retailer adoption simply hasn’t scaled fast enough to justify continued investment. After years of promises about frictionless checkout, retail media, and the future of grocery shopping, that’s a pretty BIG reversal. (Source)
Now, here’s where Kelly and I had one of my favorite debates of the week. Kelly thinks this could genuinely be the END of the smart cart. Why spend all that money redesigning a shopping cart when customers already have a smartphone capable of delivering many of the same benefits? And while I desperately hope she’s right, the retail historian in me isn’t convinced. We’ve been trying to reinvent the shopping cart for decades, and I have a feeling we’ll try again. But my bigger point remains the same: Don’t put the smart cart before the store. Make your stores run smarter FIRST, and then worry about making the carts smarter. Kelly’s proposed solution? Just give the cart a phone holder. And, frankly, that might be the smartest cart innovation I’ve heard in years.
Starbucks Comps Jump 7.7%. Is Back To Starbucks Actually Working?
Starbucks closed out its fiscal year with U.S. comparable sales up 7.7%, driven by a 5.2% increase in average ticket and a 2.4% increase in transactions. That’s a significant improvement from flat U.S. comps a year ago, and another encouraging sign for CEO Brian Niccol’s Back to Starbucks strategy. But with ticket growth doing more of the heavy lifting than traffic, should we be celebrating or getting a little nervous? (Source)
Kelly saw a cautionary flag. Higher tickets are great, but if customers aren’t coming back more frequently, how sustainable is the turnaround? I actually saw things differently. If Starbucks can raise the average ticket AND still grow transactions in this consumer environment, that’s a pretty encouraging sign in my book. But here’s where we found common ground: Starbucks still has an operations problem to solve. I’ve personally walked into stores with what feels like a hundred mobile orders waiting to be made. And if the whole point is getting people BACK to Starbucks, shouldn’t the in-store experience be worth coming back for? Kelly and I discussed everything from loyalty incentives to rethinking store formats. Because bringing customers through the door is one thing. Getting them their coffee before their meeting ends is another.
Walmart+ Heads South Of The Border. How Far Can This Membership Go?
Walmart+ has officially launched in Mexico, bundling free shipping and delivery with entertainment, mobile connectivity, and even healthcare benefits. At MXN $89 per month, the program is another step in Walmart’s international membership ambitions, following its launch in Canada earlier this year. And it raises a pretty interesting question. Just how far can Walmart take Walmart+ around the world? (Source)
Kelly pointed out that Mexico could be a fascinating test of Walmart’s membership economics. With a lower price point than the U.S. program, Walmart is essentially betting that more frequent shopping and stronger customer loyalty can make up for lower membership revenue. And I think she’s onto something. My prediction? Chile could be next. But beyond international expansion, there’s still a TON of opportunity in the markets Walmart already serves. I’ve said it before, and I’ll say it again. Walmart has become my go-to for quick deliveries, to the point where I sometimes question the value of Amazon Prime. And when customers are literally paying you for the privilege of shopping with you? That’s a pretty powerful retail flywheel.
Are We Sleeping On Amazon? Andy Jassy Certainly Thinks So.
Amazon CEO Andy Jassy thinks Wall Street isn’t giving Amazon’s retail business enough credit. During the company’s Q3 earnings call, he pointed to fresh groceries and everyday essentials growing three times faster than the rest of the store business. And with Amazon reporting record operating margins, there’s certainly plenty for investors to celebrate. But here’s the number that caught my attention: online store sales grew just 2%. So, are we really sleeping on Amazon retail, or is Jassy trying to wake us up to something that isn’t quite there yet? (Source)
Kelly acknowledged that Amazon’s broader results are impressive, but questioned how much credit the retail business deserves for that success. And I wasn’t buying the don’t-sleep-on-us argument either. Sure, Amazon is making progress in fresh grocery and everyday essentials, but if those categories are growing so quickly, why isn’t that translating into stronger overall store sales? To me, it reinforces something we’ve discussed on this show for years. Amazon is becoming a powerful grocery top-up destination, but that doesn’t necessarily make it the place customers go for their primary grocery shop. Still, those incremental purchases matter. Every grocery order Amazon captures is one less opportunity for a traditional grocer. And as I’ve said before, retail competition can be a death by a thousand cuts.
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Be careful out there,
Chris and the Omni Talk team
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Omni Talk® is the retail blog for retailers, written by retailers. Chris Walton founded Omni Talk® in 2017 and have quickly turned it into one of the fastest growing blogs in retail.