Wash and scrub potatoes. Cut larger ones in half or quarters.
Place potatoes in a pot, cover with cold salted water. Bring to a boil and cook for about 10 minutes until fork tender. Drain and set aside.
Cook chopped bacon in a skillet over medium-high heat until crispy. Remove to a paper towel-lined plate, reserving bacon fat.
Reduce heat to medium. Add diced onion to bacon fat and cook until soft, about 6-8 minutes.
Add vinegar, sugar, salt, pepper, and 2 tablespoons of water to skillet. Bring to a boil.
Stir in cooked potatoes. Simmer for 4–5 minutes, or until liquid is mostly absorbed and potatoes are hot.
Fold in bacon and chopped parsley. Reserve some for topping if desired. Adjust seasoning and serve warm.
Notes
For extra flavor, try adding a teaspoon of Dijon mustard to the warm dressing. This salad is best served warm but can also be enjoyed at room temperature.