Wal-Mart Expands New York Delivery Footprint by Acquiring Parcel

(Bloomberg) -- In a sign of the intensifying battle for New York's online shoppers, Wal-Mart Stores Inc. acquired Parcel, a company specializing in same-day deliveries of groceries and meal kits.

The world's largest retailer plans to use the business to offer free, same-day delivery in New York City -- the most populous city in the U.S. -- as it continues to push into e-commerce to compete with Amazon.com Inc. Wal-Mart announced the purchase on its website, saying it paid less for Parcel than other acquisitions made this year, without giving more details on the terms.

Wal-Mart has sought to leverage its way into e-commerce through a string of acquisitions. It agreed to pay $310 million in cash for online apparel seller Bonobos Inc. earlier this year. In 2016, it purchased Jet.com Inc. for about $3.3 billion, with the website's founder Marc Lore going on to become head of e-commerce for Wal-Mart.

“New York City is the top market for both Jet and Walmart.com, and because of the density of the area -- along with the proximity of our fulfillment centers -- it's the perfect place for high-impact innovation,” Nate Faust, senior vice president for the retailer's e-commerce supply chain, said in a post on the company blog. “This acquisition allows us to continue testing ways to offer fast delivery while lowering our operating costs.”

Outside of New York, Wal-Mart and Jet have offered free two-day shipping for orders of $35 or more, an attempt to blunt the popularity of Amazon's two-day guarantee for members of its Prime program. Target Corp. offers same-day delivery for in-store purchases to parts of New York City for a fee and will broaden that offering to more cities next year. Earlier this month, electronics retailer Best Buy Co. expanded its same-day delivery from 13 to 27 cities.

To contact the reporter on this story: Jonathan Roeder in Mexico City at jroeder@bloomberg.net.

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Tony Robinson, Jonathan Roeder