H-E-B has purchased Favor Delivery, an on-demand delivery service headquartered in Austin, Texas. Favor Delivery will become a wholly owned subsidiary of the San Antonio-based retailer; terms of the deal were not disclosed.
Like many retailers, H-E-B is looking to increase its e-commerce presence. Favor, launched in 2013, is utilized in 50 cities across the Lone Star State and said it is the first U.S. on-demand delivery company to achieve profitability at scale. Favor provides food delivery from grocery stores and restaurants. The company enlists couriers to delivery those products to customers’ homes and businesses in under an hour.
With the purchase, H-E-B said it “gains access to best‑in‑class consumer‑facing technology and the on‑demand company's advanced delivery system. H‑E‑B will also leverage Favor's data‑driven approach to capture valuable insights to deliver the best customer experience possible.”
“With this powerful partnership, H‑E‑B accelerates its path to become a digital retail industry leader in Texas, enabling customers to choose how they shop, pay for and receive products,” the retailer said in a release announcing the deal. “The partnership also complements H‑E‑B's brick‑and‑mortar operations by growing its online presence to meet customers' evolving needs and expectations.”
H-E-B currently offers customers home delivery through its HEBtoYou program, curbside pickup at over 100 stores and the ability to shop and ship products from its website to 48 states and military bases worldwide.
H-E-B is hardly alone in its e-commerce acquisition. Walmart is in talks to purchase a stake in Flipkart, a leading e-commerce retailer in India; Kroger is in preliminary talks with Alibaba to enter China; Kroger’s offer to purchase Boxed, an online bulk retailer, was rejected earlier this month; and Target purchased delivery platform Shipt in December for $550 million.
The moves come as consumers are increasing their grocery spend online. A new report from the Food Marketing Institute found that 70% of consumers will be grocery shopping online by 2024.