H-E-B Moving Closer to Big D
H.E. Butt Grocery is the grocer in its home market of San Antonio.
It’s done very well in the Houston market, as well. Now, the company is looking
to North Texas and the Dallas/Ft. Worth area as the newest land to conquer.
The
chain, which operates four of its high-end Central Market stores in the area
(Dallas, Fort Worth, Plano and Southlake), is opening its first H-E-B supermarket
in the city of Burleson this Friday.
Jeff Thomas, who manages H.E. Butt’s Central
Texas region, told the Fort
Worth Star-Telegram that the new 88,000 square-foot store is 15 miles from
an H-E-B in Cleburne and 30 from another in Waxahachie, making the Burleson
location “a
natural progression for growth of our H-E-B Stores in North Texas.”
Bradley
Ford, Burleson’s director of economic development, told the NBC affiliate
in Dallas-Fort Worth, “I think this is a good entry point from a distribution
standpoint. They have a center, a distribution center, in Temple so it’s an
easy way to service a store in the south end of the Metroplex.”
The H-E-B
store is moving into a highly competitive market (see yesterday’s
RetailWire discussion on the milk price war between Aldi and 99c Only stores) that includes
Albertsons, Brookshire’s, Fiesta, Kroger, Tom Thumb and Wal-Mart.
Eli Daniels,
the unit director for the H-E-B in Burleson, said in a statement, “It’s
the best fresh meat, produce, and seafood by far. It’s prices so low
that you can fill your cart without emptying your wallet. It’s handmade sushi,
a tortilleria, bakery, cook ‘n grill, and car wash. It’s everything you’ve
wished for and some exciting surprises you didn’t even know you wanted.”
Discussion Questions:
Is the Burleson store the entry point for the H-E-B format into the Dallas-Fort
Worth area? How successful do you think it will be?
Of two minds on this question. H-E-B. has been in Dallas for a while with their Central Market stores and has always been considered a grocery retailer thought leader. This should help them be successful there.
On the other hand, they are going into a market that is pretty well saturated. Not sure which strength they can play up–Fiesta has the Hispanic market and lots of competitors in the value end of the business. Food Lion made the mistake of thinking they had something special and their demise was not pretty.
You know, I lived in Texas for 8 years–two in Austin and 6 in Dallas, and mentally, I had already ceded the entire state of Texas to H-E-B. They’re like the Gap of grocery, with all bases covered: the high-end gourmet with Central Market, H-E-B for the middle range, and I don’t know if they still have them, but for awhile they had H-E-B Pantry for the lower end – and it looks like they’re responding to the mass market challenge with H-E-B Plus.
I definitely regard them as one of the more innovative retailers out there–the last time I was in San Antonio, which was several years ago, they were piloting electronic shelf labels in an entire store, at a time when ESL vendors could hardly give them away for a retailer to put them in the deli (where it made the most sense initially). And Central Market puts Whole Foods to shame.
If H-E-B is making a move on Dallas, then Kroger had better watch out!
H.E. Butt will be successful in the Dallas market. They know their customers. They merchandise and price right. More importantly, they are always trying new things. They are not afraid to fail in order to learn. The Dallas/Fort Worth market is competitive but, H.E. Butt will keep pressing on until they achieve their share and sales goals.
H-E-B knows Texas and they know it well. When they first came to Houston it was a very tough market. When they came to Austin it was a very tough market. When they opened the Central Market stores in the Dallas area it was a very tough market and yet they continue to grow their base with innovation, clean stores, good marketing, and great selection.
H-E-B is a superb retailer, with deep allegiance with their consumer. There obvious challenge in Dallas is that they have broader and deeper sets of competitors from major super-regional or national chains.
However, H-E-B has consistently demonstrated that they have been able to effectively convert, acquire, and build ticket with their customer base. The August, 2010 Consumer Intentions & Actions (CIA) Survey points to the depth of the loyalty that H-E-B engenders with customers.
The H-E-B consumer spends +7% more per month at H-E-B than consumers do at other grocery stores, averaging more than $288 per month. Nearly 50% of their core customers rate them a ’10’ when it comes to being willing to recommend them to friends and family–off the charts in comparison to other merchants in the space. Shoppers have remained with them on average 12 years vs. 10.2 years for other grocers.
And, H-E-B indexes between 115 and 140 on all the key metrics for Reasons to Shop MOST often there–price, selection, location, quality, service, fresh produce, meat, one-stop shopping, store appearance, wide aisles, and the list goes on. And, H-E-B has their consumer cross-shopping the store–nearly double the percentage of consumers use them for HBA vs. the tradition grocer.
They will be a force in the Dallas metroplex.
It is destined to be
That the great H-E-B
Will fare well in Dallas
‘Cause it’s awesome in class,
Well prepared and ahead
Of most grocers, nuff said.
Kudos to the H-E-B team.
H-E-B is a phenomenal retailer, and I always love visiting their stores. This should work for them, although it won’t be a slam-dunk. Competitive pressures are high there, but H-E-B already competes with these same players and has learned tactics and strategies that work.
After Gene’s ingenious rhyme, I don’t think that can be topped. H-E-B has a reputation for executing well with quality, price and promotion. They will be successful and others will see their market share shrink.
H-E-B isn’t in Dallas already? I’m surprised, but they’ll do great. They’re a regional who knows who they are and who their customer is and they make all the right moves. I am a dyed-in-the-wool Whole Foods customer, but I must admit that since H-E-B has started carrying a lot of the same products as Whole Foods, I have found myself shopping there more often as it’s a convenient and cheaper alternative. Their Central Market concept already gives Whole Foods a run for their money.
If the regular HEB stores ever upgrade their fresh meat department to include organics, I may shop their exclusively! Did I say that? Yes, I did.
H-E-B will do quite well. They are very engaged with their customers, and do an amazing job with engagement, customer experience, and creating loyalty. The transition, with the focus, will do well in Dallas.
H-E-B has been like a buzzard waiting for the dead animals to decay. Over the past few years we have seen the failure of Albertsons, Tom Thumb, and Mynards in the Dallas metro area while Wal-Mart and Kroger have seemed to do well. Albertsons, Tom Thumb and Mynards are all operating like crippled retailers and H-E-B will probably push at least two of them out of business, taking over some of their locations.
Personally I think H-E-B should have come five years ago, but I’m never going to second guess H-E-B.
H-E-B will be successful in the Dallas/Ft. Worth market. They will continue to grow and expand until the area is theirs, similar to Houston. Those competitors such as Tom Thumb and Kroger need to get their game plan ready because H-E-B is not simply entering the market to get a small share of it. I think they also have a distribution center in the Coppell area with sufficient room for expansion. I am surprised it has taken this long.
There is an area comprising three cities between Dallas and Ft. Worth. The three cities are Hurst, Euless and Bedford. The H-E-B stands out prominently on a huge water tower on a major highway affording plenty of already free advertising to them.
H-E-B will do great in North Texas and in the Dallas marketplace. H-E-B is a very well run supermarket with a keen insight into serving its specific markets.
It’s formulaic: Successful grocery chain sprouts a flashy new store with all the bells and whistles in an affluent new market. Headlines and notoriety ensue. Happens all the time. Some work out and some don’t. Dallas is a tough market – just ask Randall Onstead. Texas has been home to lots of nice stores – Fiesta comes to mind – but they come and they go.
There’s a certain amount of narcissism baked into a new store launch like H-E-B’s in Burleson. The boss wants a sparkling legacy, a flagship store. That’s cool, but nothing more. Fun but self-indulgent. Giddy ribbon-cutting. But, for instance, how do you advertise efficiently with just one store in a major market? You don’t.
I’m not so sure. It depends on how they operate when the “novelty” of their new store(s) wears off. We have an H-E-B here in Abilene, TX (about 2 1/2 hours west of the metroplex). The service is terrible.
Previously, I lived in south Texas where H-E-B is king. When I moved to Abilene, I was happy to see an H-E-B here until I realized that the prices were higher and the service was non-existent. On the occasions I’ve shopped there, employees were too busy chatting on cell phones to answer questions, even managers didn’t know where items were, and there was no one to provide carry-out service for my purchases. Friends have told me they’ve had to sack their own groceries at times, too.
For the size of the Abilene market, there is a lot of competition here. United Supermarkets and Albertsons provide much better customer service than H-E-B, as does the local IGA chain. Being so close to the metroplex, I hope that Aldi moves here, too. H-E-B isn’t dominant in this part of Texas as it is in the south; it needs to improve customer service.