H-E-B Tries On Plus Size

Oct 25, 2004
George Anderson

By George Anderson

Even H.E. Butt is not immune to Wal-Mart’s incursion into the food business. While the world’s largest retailer and its Supercenter format has gobbled up dollar share from supermarkets
in many places around the country, it has only nibbled at H-E-B’s hold in its core Texas markets.

According to the Shelby Report, H-E-B’s market share in San Antonio fell 0.99 percent in the second quarter. It is still the clear leader in San Antonio, however, with
64.23 percent of the market’s sales.

H-E-B didn’t become the market leader, however, by taking the competition or its customers for granted.

Roxanne Orsak, H-E-B’s senior vice president of general merchandise and drugstore merchandising and procurement told the San Antonio Express-News, “Everyone’s fighting
for foot traffic, and the perception is that food will drive it. We go back to the customer when competition moves in. What does the core customer want?”

The chain is currently testing a larger store format, H-E-B Plus, in Austin, Waco and San Juan. The new format is up to 40 percent larger than a typical H-E-B and carries about
10,000 additional SKUs.

As with everything else the company does, the new Plus stores are done in unique H-E-B style.

“The San Juan store has a fabulous cosmetics counter that does makeovers with department-store quality and shelving that makes the product feel special,” said Jon Hauptman, vice
president at Willard Bishop Consulting. “They make it a destination, and not just a traditional grocery store.”

Moderator’s Comments: What makes H-E-B successful and why have so many other supermarkets failed to learn from its

Roxanne Orsak told the San Antonio Express-News that when H-E-B was looking to create its party section, it went to kids’ birthday parties to find
out what Moms wanted. The company doesn’t just talk about getting in touch with its customers. It does it.

George Anderson – Moderator

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