Jet.com throws lifeline to Blue Apron, whose stock jumps 11%
Jet.com is throwing a lifeline to Blue Apron Holdings Inc.
Jet, Walmart Inc.’s urban-focused website, began carrying four Blue Apron meal kits Monday to help boost its fledgling grocery business. Jet’s customers in the New York City area can make the meals part of their regular grocery order without having to subscribe to Blue Apron’s service.
The tie-up aims to deliver more customers to the beleaguered meal-kit company, whose shares have plummeted since it went public last year. After the announcement, Blue Apron shares jumped 11.4% to close at $1.27.
This is New York-based Blue Apron’s latest move to expand beyond its subscription business, which is reeling from customer defections as more companies — including Jet’s parent Walmart — enter the meal-kit space.
“This is a big, big important step for us,” Blue Apron Chief Executive Brad Dickerson said, adding that the “vast majority” of customers would rather order meal kits on short notice, eschewing the traditional Blue Apron subscription model that requires users to plan meals well in advance.
The partnership also brings new credibility to Jet’s grocery ambitions and amps up the fierce battle for New Yorkers’ online food budgets. Jet is up against Amazon.com Inc.’s Prime Now service, Ahold Delhaize’s Peapod and closely held market leader Fresh Direct, which are all investing to capture more customers.
Acquired by Walmart for $3.3 billion in 2016, Jet is making a play for busy, affluent city dwellers who already shop on Jet for general merchandise and household goods. The company plans to open a fulfillment center in New York’s Bronx borough this year, and grocery deliveries will be handled by Parcel, a New York logistics company Walmart bought last year. Jet doesn’t disclose what share of its sales come from food, but “it’s smaller than we want it to be,” President Simon Belsham has said.
Jet offers Blue Apron a source of new revenue at a crucial time. The number of people ordering Blue Apron’s signature boxes of ingredients to make home-cooked meals dropped 24% in the second quarter compared with the same period last year, leading CEO Dickerson to look for new channels to sell his wares, such as Costco Wholesale Corp. and online delivery services like Seamless and GrubHub Inc. Blue Apron has projected declining sales over the back half of 2018, and before Monday, its shares fell more than 70% this year.
The Blue Apron meal kits on Jet each serve two people and can be prepared in about 30 minutes, the companies said. They’ll range in price from $16.99 for the Italian farro bowl to $22.99 for the seared steaks meal.
3:20 p.m.: This article was updated with Blue Apron shares’ closing price.
This article was originally published at 9:10 a.m.