H-E-B augments home delivery through Favor Delivery acquisition
H‑E‑B on Thursday augmented its on-demand home delivery service through its acquisition of Favor Delivery, headquartered in Austin. Favor Delivery will become a wholly owned subsidiary of H-E-B.
The terms of the transaction were not disclosed.
“I am thrilled to have H‑E‑B join forces with another well‑respected and innovative Texas company,” Martin Otto, H‑E‑B COO, said. “We share similar values, including a commitment to excellence in customer service and to our greatest resource – our people. Over the past two years, we have established a strong working relationship with Favor that has proven to be immensely successful for both companies. We see a unique opportunity with this partnership to support and accelerate each other’s growth through the sharing of experience, insight and resources.”
“Convenience matters to consumers and retailers have to keep up. So, it’s no surprise to me that H-E-B made a play to acquire an already successful technology company built around convenience to compete with the likes of Instacart,” Casey Gannon, vice president marketing Shopgate, said. “H-E-B now has the opportunity to create personalized experiences based on their buyers’ behavior using sensor data native to their phones and beacon technology within stores. They’ll know how close their buyers are to stores and what they do when in-store, allowing them to cater to consumers’ preferences using a mobile-first environment.”
Favor will continue to operate independently as a separate brand led by CEO and president, Jag Bath. H‑E‑B will retain all of Favor’s employees and its 50,000 Runners, who operate as contract delivery drivers.
With this 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 partnership also complements H‑E‑B’s brick‑and‑mortar operations by growing its online presence to meet customers’ evolving needs and expectations.
Founded in 2013, Favor has quickly expanded its presence to 50 cities across the state of Texas, where it is currently the best-rated home delivery service. In 2017, Favor more than doubled its footprint across the state and became the first U.S. on-demand delivery company to achieve profitability at scale.
“We could not be more excited to be part of H‑E‑B,” Bath said. “I am incredibly proud of our team’s success and the business we have built at Favor. H‑E‑B’s extensive resources, capital and retail food industry experience will enable us to further build on our momentum and significantly accelerate our growth throughout Texas.”
With Favor, H‑E‑B gains access to a best‑in‑class consumer‑facing technology and the on‑demand company’s advanced home delivery system. H‑E‑B will also leverage Favor’s data‑driven approach to capture valuable insights to deliver the best customer experience possible.
This transaction is the latest in a series of strategic investments in technology and partnerships that H‑E‑B has forged to enhance its digital and delivery offerings in Texas. Home grocery delivery is already a key pillar of its offering through HEBtoYou. H‑E‑B also already offers customers the convenience of “Curbside Pickup” at over 100 stores, a service that enables customers to order online and have their groceries delivered right to their cars, and HEB.com offers customers the ability to order and ship grocery, drugstore and general merchandise products to 48 states and military bases worldwide.
Philly-area Giant home to fourth Peapod wareroom in Keystone State
Ahold Delhaize’s Peapod, along with its sister division Giant Food Stores, on Thursday opened its newest wareroom in North Coventry, Pa.
“We want to thank greater Philadelphia Peapod and Giant customers as they have responded positively (and literally) with open doors since 2011 to our service, leading to tremendous growth in this market,” Walt Lentz, Peapod’s acting president, said. “The new wareroom will allow us to increase capacity and meet the larger demand but we are also proud to bring 120 jobs to North Coventry. Shoppers choose Peapod because they know they can rely on us to deliver convenience, personalized solutions and great value on everyday essentials they care about the most.”
“We want to be the ultimate meal planning and grocery solution for our customers,” John Ponnett, senior vice president, retail operations, Giant, said. “The growth we are seeing tells us that our customers want what we all want – choices. We get it. That’s why we provide offer a great in-store experience as well as the option of online grocery shopping and home delivery through Peapod.”
This will be the fourth Peapod wareroom to open in Pennsylvania. The investment in a new distribution location comes as Peapod has experienced double digit growth in the region for the last three consecutive years.
With more and more shoppers embracing the convenience of online grocery delivery, the new wareroom will enable Peapod to serve up to 25% more shoppers in the greater Philadelphia area.
Peapod and Giant will be hosting a grand opening event on Feb. 20 at 2 p.m. at the wareroom, located within and attached to the Giant store in Pottstown, Pa. Executives from Peapod and Giant will be speaking along with local representatives.
In honor of the opening, Peapod will be making a donation to the Coventry Food Pantry at the ceremony.
Retail sales decline during January
Retail sales fell 0.26% in January, the biggest decline in 11 months, but increased 5.4% year-over year, according to the National Retail Federation. (The NRF numbers exclude automobiles, gasoline stations and restaurants.)
The January numbers follow 5.1% unadjusted year-over-year growth in holiday sales during November and December, which was revised down slightly today from the 5.5% initially reported. December was revised to be down 0.1% from November seasonally adjusted.
“These numbers reinforce a positive start to 2018 that reflects ongoing consumer optimism brought about by solid economic fundamentals,” NRF chief Economist Jack Kleinhenz said. “Some observers are spinning this as a disappointing month, but you’ve got to keep in mind that we’re coming off one of the strongest holiday seasons in years. It’s also difficult to draw conclusions from month-to-month changes because of the huge seasonal-adjustment factors.”
The January results comes as NRF is forecasting that 2018 retail sales will increase between 3.8% and 4.4% over 2017.
Most economists were not worried by the January dip and noted that the fundamentals are still in place for steady retail growth.
“With jobs growth still strong, consumer confidence at an unusually high level and the recent tax cuts providing a one-off boost to disposable incomes this month, the near-term prospects for consumer spending remain fairly bright,” Andrew Hunter, U.S. economist for Capital Economics, told the AP.
Specifics from key retail sectors during January include:
- Online and other non-store sales were up 13.2% year-over-year and were unchanged from December.
- Furniture and home furnishings stores were up 6.6% year-over-year but down 0.4% from December seasonally adjusted.
- Building materials and garden supply stores were up 6% year-over-year but down 2.4% from December seasonally adjusted.
- Clothing and clothing accessory stores were up 3.1% year-over-year and up 1.2% from December seasonally adjusted.
- General merchandise stores were up 3% year-over-year and up 0.2% from December seasonally adjusted.
- Electronics and appliance stores were up 2.9% year-over-year and up 0.5% from December seasonally adjusted.
- Health and personal care stores were up 1.8% year-over-year but down 1.2% from December seasonally adjusted.
- Sporting goods stores showed the only year-over-year decrease, down 5.9% and also down 0.8% from December seasonally adjusted.