HEB partnering with on-demand delivery service

H-E-B says it will retain all of Favor’s employees and its 50,000 Runners who operate as contract delivery drivers

The company added a $22 million Series B round of funding past year, led by Austin venture capital firm S3 Ventures, to bring its service to more cities in Texas.

Like many retailers, H-E-B is looking to increase its e-commerce presence.

Favor was founded in 2013 and is now operating in 50 cities across Texas after doubling its footprint in the state past year.

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The Favor acquisition gives H-E-B more strength in the highly competitive grocery delivery arena. The grocery store already offers some grocery delivery through HEBtoYou, as well as Curbside Pickup of online orders at more than 100 stores. It prefers to grow organically - and there's really no reason to argue with that approach, given its reputation for customer loyalty, execution and faithfulness to its Lone Star roots. Kroger has beefed up its store count in Houston and Dallas, and has rolled out its ClickList service to stores in top markets. Walmart, which has almost 600 outlets in Texas, including Supercenters, Neighborhood Markets and Sam's Club stores, has aggressively rolled out store pickup, and sees several hundred orders a day come in from its Dallas locations. "H-E-B is a fantastic brand". Sam's Club just recently started offering an online membership club with free shipping.

"We're proud to announce that our companies are joining forces to provide Texans with an innovative, convenient and world-class retail experience", H-E-B CEO Martin Otto said in a video, featured above, posted to Twitter. And Walmart is working with August smart lock company to test in-home delivery of grocery items and other packages.

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. This could address concerns consumers have over quality and control in the grocery buying process. Supermarkets are scrambling to set up customer-facing ordering and delivery solutions to handle this growing wave.

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