H-E-B acquires delivery service Favor

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SAN ANTONIO — Regional supermarket operator H-E-B is acquiring Austin-based on-demand delivery service Favor. Terms of the deal were not disclosed.

H-E-B said the deal will help it become a digital industry leader in Texas, giving its customers more choices about how they shop, pay for and receive products.

“I am thrilled to have H-E-B join forces with another well-respected and innovative Texas company,” said Martin Otto, H-E-B’s Chief Operating Officer. “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.”

Favor will be a wholly owned subsidiary of H-E-B but will continue to operate independently, led by its president and chief executive officer Jag Bath. H-E-B will keep all of Favor’s employees and its 50,000 Runners, who operate as contract delivery drivers.

“We could not be more excited to be part of H-E-B,” said Bath. “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.”

Founded in 2013, Favor has quickly expanded its presence to 50 cities across the state of Texas, where it is currently the best-rated 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, the company said.

H-E-B said the Favor deal will give it access to best-in-class consumer-facing technology and the on-demand company’s advanced delivery system. H-E-B said it will also leverage Favor’s data to learn what customers want in the delivery space, in order to improve its customer service.

The transaction is the latest in a series of technology investments and partnerships H-E-B has forged to enhance its digital and delivery offerings in Texas, the San Antonio-based retailer said. H-E-B already offers home grocery delivery via its HEBtoYou service, and the retailer also offers “Curbside Pickup” at more than 100 stores. In addition, customers can use HEB.com to order and ship grocery, drugstore and general merchandise products to 48 states and military bases worldwide.




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