Walmart's NYC Delivery Push Suffers Loss of Divison Chief

(Bloomberg) -- The chief executive officer of Parcel, the New York City delivery company owned by Walmart Inc., has departed, dealing a potential blow to the retailer’s push into the grocery business in the Big Apple.

Jesse Kaplan, who sold his last-mile delivery startup to Walmart last year, “has decided this was a natural point for him to step down,” Alyssa Ciambriello, spokeswoman for Walmart unit Jet, said in an emailed statement. Chief Operating Officer Jackson Fratesi will now lead Parcel and its more than 200 employees, she said. He’ll report to Hany Elkordy, a one-time Amazon.com Inc. executive who just joined Walmart’s e-commerce arm as vice president of logistics and last-mile delivery.

Kaplan, a Harvard University graduate, founded Parcel in Brooklyn’s hip Bushwick neighborhood in 2013. The company used routing algorithms and a fleet of leased vehicles to bring everything from meal kits to mattresses to city dwellers. Walmart acquired the company last fall, in a deal valued at less than $10 million, website Recode reported at the time. Jet is now using Parcel to handle deliveries for its new fresh grocery service, which is battling for customers with Amazon as well as Ahold Delhaize’s Peapod unit and local player FreshDirect.

Kaplan didn’t immediately reply to an email sent to his personal account.

Jet has opened a 200,000 square-foot distribution center in the Bronx that’s better suited to fulfilling same-day and next-day fresh grocery orders across the metropolitan region. The Jet facility began shipping orders bound for all five of the city’s boroughs on Nov. 19, according to Walmart spokesman Ravi Jariwala. Closely-held rival FreshDirect has also relocated to the Bronx after running out of space at its original home in Long Island City.

Jet’s push into grocery includes selling Blue Apron meal kits and New York-based upscale brands like Big Gay Ice Cream.

Parcel was part of an e-commerce acquisition binge by Walmart, which is experimenting with various ways of getting goods to its millions of customers. The retailer also works with logistics companies including DoorDash Inc., Deliv and Postmates Inc., and has even used its own store employees to drop items off on their way home from work. Walmart’s U.S. online sales grew 43 percent last quarter, and it plans to offer same-day delivery to more than half of the U.S. by the end of next year.

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