New Strategy and Officer to Go With It at H-E-B
By George Anderson
H.E. Butt Grocery Co. is celebrating its first 100 years in business and making plans to be sure the company will be around for another hundred.
The San Antonio, Tex.-based supermarket chain has begun implementing a new strategy in recent years rolling out its larger H-E-B Plus store concept with added emphasis on non-foods, expanding its presence in Mexico and building its private label.
To focus the organization on its path to future growth, H.E. Butt brought in Craig Boyan from the Monitor Group in Boston to serve as the grocer’s first chief strategic officer. The Monitor Group, reports the San Antonio Express-News, helped H.E. Butt develop the H-E-B Plus concept.
The chairman of H.E. Butt, Charles C. Butt, said that the company’s growth required that it bring in someone with Mr. Boyan’s talents and experience to help him and chief operating officer Bob Loeffler meet the organization’s needs.
“For a company our size, we do have complexity with our sizable food manufacturing activity, our private brands, our Mexico activity, real estate, the needs in our stores, and Central Market is another aspect,” he told the Express-News.
Moderator’s Comment: What is your assessment of H.E. Butt’s strategy for growth?
The grocer has clearly come to the conclusion that bigger is better when going up against the likes of Wal-Mart’s Supercenters, which explains the company’s
emphasis on the H-E-B Plus format.
Interestingly, it appears as though the retailer is backing off some from its Central Market concept, preferring to bring products sold in that format into
its traditional H-E-B and new H-E-B Plus stores instead. –
George Anderson – Moderator
H-E-B’s strength within the Hispanic community over the years indicates a retail culture that is in-touch with consumer’s needs on a more responsive and flexible level. They have a track record of successful execution and I believe their new initiatives should follow suit. In this time of innovate or die, they are being ambitious and innovative. They should succeed.
I think H-E-B’s biggest hurdle for the future is a lack of competition. In their core market San Antonio they eliminated most competitors on price (excluding Wal-Mart). In the absence of non-price competition, what happens when the next innovative non-price focused competitor comes to town? Will they have the cultural flexibility to react without going bankrupt?
I never question the good judgment of H-E-B. They make mistakes like everybody else, but they don’t have Wall Street in the way to keep them from correcting the mistakes. H-E-B typically does not venture into a new area of business without long careful consideration. They understand the risks they are taking. Since they have such a good track record of success, they tend to get more people to believe in what they do which gives them an even better chance for success.
Bringing in Boyan is a real plus. He has insights across the value chain, knows consumers and he knows how to execute strategies. Most retailers tend to do mostly “retail thinking” and not big picture and consumer thinking. I think H-E-B is on track and because they can stay with a plan, they have an excellent shot and delivering the strategy and the results.
H-E-B is a superb operator and everyone knows it. I would be more worried about the problem of ownership succession than anything competition is going to do.
H-E-B has proven its strategic, consumer marketing, and operations excellence over the years! It has always been a step or two, (like Publix) ahead of the needs of the marketplace. And importantly, it is more than willing to try new formats, and test new ideas!!!!
With its geographic location, it has mastered the understanding of its shoppers, and continues to research the needs of them, especially the Hispanic population.
Only a better marketing retailer entering the same locations could affect H-E-B’s efforts, and this seems unlikely. Wal-Mart is not H-E-B’s competition, either.