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Wal-Mart Stores Inc (WMT.N) announced on Tuesday that it has acquired Parcel Inc, a New York-based last-mile delivery startup, as the retailer seeks to improve its same-day delivery offering and gain a competitive edge against Amazon.com Inc (AMZN.O).

"We plan to leverage Parcel for last mile delivery to customers in New York City – including same-day delivery – for both general merchandise as well as fresh and frozen groceries from Walmart and Jet," Wal-Mart said in a blog post.

Parcel, a 24/7 operation that delivers packages the same-day, overnight and in scheduled two-hour windows, was bought for an undisclosed amount “smaller than previous acquisitions” Wal-Mart made this year, the discount retailer said.

Competition between the two retail giants has heated up over the past months, with Wal-Mart buying online men’s fashion retailer Bonobos Inc for 310 million dollars, on the same day Amazon announced a 13.7 billion dollars deal to buy upmarket grocer Whole Foods Market Inc.

Although both Wal-Mart and Parcel have preferred not to disclose the financial terms of the agreement, ´Recode´ cited a source stating that the acquisition price was less than 10 million dollars.