Instacart Kills Its Smart Cart Business, Taking $55M-$80M in Charges

Instacart will wind down its Caper Cart smart cart business and take pre-tax charges of approximately $55 million to $80 million, the company disclosed Monday in a regulatory filing. The grocery technology firm expects to complete the shutdown by the end of the second quarter of 2027.

Employee termination costs account for an estimated $12 million to $17 million of the total charge. The decision ends a five-year hardware push that began when Instacart bought Caper AI for $350 million in cash and stock.

The company blamed slow retailer uptake. "Retailers and brands today are balancing a number of competing priorities, and we're seeing them prioritize investments in solutions that can modernize stores at scale," Instacart said in the announcement. "While Caper is a great product, the business reality is that retailer adoption has not scaled quickly enough to justify our continued investment."

What does the retreat mean for Instacart?

Instacart said the next phase of its in-store strategy will focus on intelligence and software rather than hardware. The company argued its software, data and artificial intelligence capabilities give it an advantage in providing retailers and brands with information on in-store performance.

Monday's announcement reverses half a decade of work. Instacart had touted smart carts as a way to gamify shopping, help customers find items faster and add spending transparency through an on-screen tally of cart contents. For brands, the carts offered new in-store real estate to serve targeted ads.

The pullback comes as the low-margin grocery industry tightens spending amid macroeconomic pressure. Analysts had long flagged the technology's high costs.

How did Instacart try to make Caper work?

The company pushed hard on adoption. Last year, Instacart added several customer-facing tools to the carts' screens. It also linked with point-of-sale equipment suppliers to get smart carts into independent grocery and convenience stores.

Until Monday, Instacart publicly expressed optimism. In early August, CEO Chris Rogers told investors that Caper continues to scale with both new and existing partners, including Weis Markets and Lakefront in the U.S. and partners in the U.K.

What replaces the carts?

Instacart is leaning into software it can sell without hardware installed in aisles. The company recently unveiled new in-store software solutions that give grocers and CPG brands "a live view of stores."

It is also buying capability. This summer, Instacart acquired Arpalus, whose AI-powered system lets workers record product levels in stores using a smartphone app. Instacart said at the time of the deal that the technology would help its workers fulfill orders more accurately.

The wind-down signals where Instacart sees the money flowing: retailers want in-store modernization at scale, and software scales cheaper than carts full of screens, cameras and payment gear.