Target buys same-day grocery delivery service Shipt for $550M

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Target buys same-day grocery delivery service Shipt for $550M
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The battle for same-day grocery delivery supremacy is on!

Target has announced it plans to acquire same-day delivery grocery app Shipt for $550 million in cash.

RELATED: The biggest threat to your grocery budget in 2018

Same-day delivery will be in 600 stores by early 2018

This deal is expected to ramp up quickly. By early 2018, about half of Target’s 1,834 stores will get same-delivery from Shipt’s community of shoppers, according to the press release.

Target will use the remainder of the new year to get its other half of stores up to speed with Shipt shoppers — well before the 2018 holiday season.

The same-day delivery via Shipt will initially include groceries, essentials, home, electronics and other products from Target. All major product categories will be available for same-day delivery by the end of 2019, the retailer says.

This acquisition is Target’s effort to stand its ground against Amazon and the e-commerce giant’s Prime Fresh grocery delivery service, not to mention its recent industry-shaking $13.7 billion acquisition of Whole Foods.

Meanwhile, on the same day that Target announced its acquisition of Shipt, Amazon had an announcement of its own.

Prime Free Same-Day Delivery and Prime Free One-Day Shipping are both expanding to more than 8,000 cities and towns.

A closer look at Target’s buy of Shipt

For those not familiar with Shipt, it’s a service that employs about 20,000 personal shoppers who deliver groceries to your door when you order them via a proprietary app. Customers pay a $99 annual fee for unlimited deliveries.

Shipt is expected to be incorporated into Target’s app and website at a date to be determined in the future.

Interestingly, Target won’t hoard Shipt for itself. The delivery service will also continue to work with the likes of Publix, Meijer, Kroger, Costco and others when it’s owned by the Red Retailer.

One thing Target says it won’t have access to is customer data from competitors who also deliver through Shipt!

This newly announced deal is expected to close before the end of 2017.

RELATED: 21 ways to spend less money at the grocery store

Big changes are coming to Target

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Theo Thimou About the author:
Theo is director of content for clark.com. He has co-written 2 books with Clark Howard, including the #1 New York Times bestseller Clark Howard's Living Large in Lean Times.
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