H-E-B
From Wikipedia, the free encyclopedia
| H.E. Butt Grocery Company | |
|---|---|
 |
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| Type | Private |
| Founded | 1905 |
| Headquarters | San Antonio, Texas |
| Key people | Charles Butt, Chairman & CEO; Martin Otto, CFO; Bob Loeffler, COO |
| Industry | Retail (Grocery) |
| Products | Bakery, dairy, deli, frozen foods, gasoline, general grocery, meat, pharmacy, produce, seafood, snacks |
| Revenue | $12.4 billion USD (2005) |
| Employees | 60,000+ |
| Website | www.heb.com |
H.E.Butt Grocery Company (abbreviated H-E-B) is a privately held San Antonio, Texas-based supermarket chain with less than 300 stores throughout Texas and northern Mexico. H-E-B ranked No. 11 on Forbes' 2006 list of "America's Largest Private Companies" based on 2005 revenue of $12.4 billion.[1] Supermarket News ranked H-E-B No. 14 in the 2007 "Top 75 North American Food Retailers" based on 2006 fiscal year estimated sales of $12.4 billion.[2] Based on 2005 revenues, H-E-B is the twenty-seventh largest retailer in the United States.[3]
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[edit] History
The company was founded in 1905 when Florence Butt opened C.C. Butt Staple and Fancy Groceries on the ground floor of the family home in Kerrville, Texas. In 1919, Howard Edward Butt, her youngest son, took over the store upon his return from World War I. In 1924, he expanded the Butt Grocery Company with a new store in Junction, about 60 miles (97 km) from Kerrville. Charles, the youngest son of Howard E. Butt, became president of the H.E. Butt Grocery Company in 1971. Today, Charles Butt is chairman and CEO of H-E-B, having grown the business from sales of $250 million in 1971 to $13 billion in 2006. In 2003, the company was #10 on Forbes' list of largest privately held companies; H-E-B is also the largest privately held company in Texas. Mr. Butt, whose fortune is estimated to be over $2 billion, is the richest man in San Antonio.
Historically, the company is known for its generosity, with 5 percent of annual pre-tax earnings given to civic and charitable causes in the communities they operate in, including education and food banks. In December 2006, H-E-B chairman Charles Butt gave $1 million to the McNay Art Museum for the new Jane and Arthur Stieren Center for Exhibitions.[4]
H-E-B is also very environmentally driven, focusing on recycling and conservation, and in 1999 began converting their Houston distribution fleet to run on liquified natural gas.
The year 2005 marked the company's 100th year in operation.
In October 2007 HEB recognized domestic partners in its healthcare plan for the first time. The plan allows domestic partners of employees to receive all of the same benefits of a married couple except for federal benefits such as healthcare reimbursement accounts.
[edit] Accusations of Predatory Pricing
Local grocery chains Handy Andy and Centeno sued H-E-B claiming that they were forced into bankruptcy because of H-E-B's unfair pricing.[5] In 1995, H-E-B paid Centeno Super Markets $6.5 million to settle a predatory pricing lawsuit.[6]
[edit] Operations
[edit] Central Market
In 1994, H-E-B introduced its popular Central Market concept in Austin. Originally test-marketed in 1990 as H-E-B Marketplace in San Antonio, Central Market is an upscale store featuring hard-to-find gourmet foods and includes a European bakery, a deli with meats and cheeses from around the globe, juice and ice cream bars, humidors, and extensive wine and beer selections.
The chain is now composed of eight stores (two in Austin and one each in Dallas, Fort Worth, Houston, Plano, Alamo Heights (San Antonio area), and Southlake). While still bannered as H-E-B Marketplace in San Antonio, this initial concept store is now a standard (core) food-drug store.
[edit] Hybrid formats
H-E-B operates four (upscale) "hybrid" format stores: The Woodlands Market in The Woodlands in unincorporated Montgomery County (Houston area), Kingwood Market in the Kingwood section of Houston, and the Austin-Escarpment store in south Austin. A fourth store opened on March 22, 2008 in Westlake (Austin) when it was finished after the acquisition and remodeling of the former Albertson's store.
In 2006, the two largest stores in the Houston region debuted when new 125,000 sq ft (11,600 m²) stores in unincorporated western Harris County (near Katy) [1] and Beaumont opened.[7][8] The two new stores resemble Plus! stores, though the stores are designed as hybrid formats featuring an expanded assortment of general merchandise. The Katy store was the first of H-E-B's stores to feature a Maui Wowi franchise. In the fall of 2007, H-E-B will open the first Houston-region "H-E-B Plus!" store in Pearland. In Northwest Harris County, the Klein HEB store, located at Stuebner Airline and Louetta Blvd, was upgraded with a full Cafe on the Run.
All six of these stores contain a Central Market Café on the Run restaurant and feature select items from both Central Market and core H-E-B stores.
Expanding in Northwest Harris County. In October 2007, HEB will open it's "Cypress Market" store, located at the intersection of Highway 290 and Barker-Cypress. In November 2007, it's sister store the 112,000 sq ft (10,400 m²) "Vintage Market" store will open at the intersection of State Highway 249 and Louetta in unincorporated northwest Harris County in greater Houston.[9]
[edit] H-E-B Plus!
In 2004, the company launched three (in Austin, San Juan and Waco) H-E-B Plus stores, 109,000-square-foot (10,100 m²) megastores with an expanded focus on non-food categories such as entertainment and other "general" merchandise. The non-foods focus was further expanded in 2005 with the addition of three new locations (Corpus Christi, Round Rock and San Antonio) comprising 161,000 sq ft (15,000 m²). each. These stores offered several new departments including Do-It-Yourself and Texas Backyard, and greatly expanded product categories in baby, card and party, cosmetics, entertainment, housewares and toys, even including a gift registry.
Several other locations now operate, including stores in Flour Bluff (Corpus Christi area), Beaumont, Katy, Cypress, Kyle,[10] Laredo, Leander,[11] Mission, Rio Grande City, San Antonio,[12] and Victoria. H-E-B has plans for several additional H-E-B Plus stores statewide,[13] including stores in,[14] Midland, Pearland,[15] and San Antonio.[16][17]
[edit] H-E-B Video Central
In 1987 H-E-B began H-E-B Video Superstore, a chain of video rental stores that were later renamed H-E-B Video Central. After growing to 33 locations, H-E-B sold the chain to Hollywood Entertainment in 1993.
[edit] Private label manufacturing
The company operates several manufacturing facilities in Texas, including one of the largest milk and bread processing plants in the Southwest.[18] H-E-B produces many of their own-brand products, including milk, ice cream, bread, snacks, and ready-cooked meats and meals. These and other private-label products are sold under various brands, including "Central Market Naturals", "Central Market Organics", "EconoMax", "H-E-B", "H-E-Buddy", "Hill Country Fare" and "Personal Expressions." "H-E-B Creamy Creations" ice cream, "H-E-B Mootopia" milk, and "H-E-B Fully Cooked" meats are perhaps the most well-known and successful private brands.[citation needed]
[edit] In-store leasing
Several stores include multi-tenant operations through third-party lease arrangements. Many stores include a bank operation and cellular kiosk. Common nationally recognized tenants include Sprint-Nextel, IBC Bank, Enterprise Rent-A-Car,[12] Panda Express, Chase Bank and Maui Wowi.[19][20][21]
[edit] Markets
[edit] Austin
H-E-B operates over 40 Austin-area stores as of 2007 and holds more than a 60 percent share of the grocery market. They also operate seven stores in the Waco area and in various other communities along the I-35 corridor. On September 12, 2007, HEB announced that they acquired Albertson's five remaining Austin-area properties. Three operating locations, including stores at Spicewood Springs & 183 and at The Village at Westlake in Austin, and the Gattis School Road & Red Bud Trail in Round Rock, all were closed on October 21, 2007, and were reopened as HEB stores between early December 2007 and March 2008.[22]
[edit] East Texas
H-E-B first entered the East Texas market with its H-E-B Pantry Foods in Beaumont, Port Arthur, Carthage, Crockett, Conroe, Lufkin, Nacogdoches, and had one store in Jasper, which closed in 2005. Most of the these stores have been converted to full-size stores. H-E-B stores in Center and Nacogdoches closed in May 2007, when company officials told the Nacogdoches Daily Sentinel the Nacogdoches store was closing because the "store could not meet the growing needs of the community."
[edit] Houston
H-E-B first entered the Houston market with its H-E-B Pantry Foods stores in 1992. These limited-assortment stores were typically 30,000 square feet (3,000 m²) in size with limited perishables, including no perimeter departments such as a butcher counter, deli or bakery. H-E-B bought a northwest Houston grocery distribution facility, which included a 119,000-square-foot (11,100 m²) refrigerated warehouse, a large bakery and a major milk plant, from Safeway in 1993. The facility had been used by AppleTree Markets after it bought Safeway's Houston division in 1988.[23] Beginning in 2001, H-E-B shuttered or expanded and converted its 45 H-E-B Pantry stores to full-service (core) H-E-B grocery stores to better compete with Kroger Signature and Randalls Flagship stores. These full-service grocery stores now average 78,000 square feet (7,200 m²) in size, more than double the size of pantry stores. In 2006, H-E-B opened Mi Tienda in Pasadena — a 63,000-square-foot (5,900 m²) Latino-themed store.[24]
[edit] North Texas
H-E-B initially entered the Dallas/Fort Worth Metroplex with the 2001 opening of a Central Market in Fort Worth. Even with the addition of three more Central Market locations in the area, it is currently unclear whether H-E-B will bring their core stores to this super-competitive market. Cleburne, Ennis and Waxahachie, communities to the south of the Metroplex, each support one store. Wal-Mart stores have pre-empted this potential competition by flooding the DFW area with supercenters; the current number of Wal-Mart stores in the greater DFW market is around 125.
[edit] San Antonio
H-E-B has about 52 stores and almost a 63 percent market share in San Antonio, trumping Wal-Mart's 17 stores and 25 percent market share.[1] As of early 2002, H-E-B's then 44-store San Antonio operation had reached a 61 market share and was the area's top grocer at the same time Albertsons, then the area's second top grocer, exited the market by closing its 20 remaining area stores (after already shuttering three other stores in December 2001). At the time of their withdrawal, Albertsons held a 15 market share. Albertsons was the area's third top grocer before Kroger exited the market in mid-1993, when it closed its 15 area stores. Then, H-E-B's 37 area stores held a 43.2 market share, Kroger's 15 area stores a 13.7 share, and Albertsons' 10 stores a 13.1 share.
[edit] South Texas
As of March 2007, there are seven H-E-B stores, an H-E-B Plus, and two H-E-B's that are under construction in the Laredo metropolitan area, and the stores take 100% of the market share due to closings of Albertsons LLC and Kroger stores in the past decade. There are several locations throughout the Rio Grande Valley region including five in McAllen, five in Brownsville, three in Harlingen, three (one being H-E-B Plus) in Mission, two in Edinburg, two in Weslaco, one H-E-B Plus in San Juan, and nine in minor cities around the Rio Grande Valley. H-E-B also operates two stores in Del Rio, one in Eagle Pass and one in Uvalde.
[edit] West Texas
H-E-B opened five stores in the West Texas communities of Abilene, Big Spring, Midland, Odessa, and San Angelo in the 1990s. The Midland store was recently remodeled to the Plus! format, which reopened in the fall of 2007.[25]
[edit] Mexico
As of mid 2006, H-E-B has operations in five Mexican states: Coahuila (3 stores), Guanajuato (1 store), Nuevo León (17 stores), San Luis Potosí (1 store), and Tamaulipas (5 stores). They have 15 stores in the Monterrey metropolitan area, and it was in this city where they started operations in Mexico in 1997. H-E-B in Mexico competes fiercely with Soriana, Wal-Mart and Bodega Aurrerá. H-E-B's 25 Mexico stores accounted for approximately 6.7% of the company's sales in fiscal year 2006.[2]. It is not uncommon to see receipts from its competitors pasted around the store with certain items highlighted, pointing out the fact that these items are cheaper at H-E-B, a common practice at supermarkets on both sides of the border.
[edit] Proposed Expansion
[edit] Louisiana
H-E-B opened its first store outside of Texas in 1996 — a 24,000-square-foot (2,200 m²) pantry store in Lake Charles. However, H-E-B closed its sole Louisiana store in 2003.
[edit] References
- ^ a b H-E-B still 11th-largest private U.S. company. MySA.com (November 15, 2006). Retrieved on 15 November 2006.
- ^ a b 2007 Top 75 North American Food Retailers, Supermarket News, Last accessed February 24, 2007.
- ^ Top 100 Retailers: The Nation's Retail Power Players (PDF), Stores, July 2006.
- ^ Butt gives $1 million for McNay expansion, MySA.com, December 18, 2006.
- ^ A Century of Shopping: H-E-B hits 100. MySanAntonio.com (November 22, 2005). Retrieved on 15 June 2007.
- ^ The Paradox of Predatory Pricing. Cornell Law Review (November 1, 2005). Retrieved on 15 June 2007.
- ^ H-E-B Announces Closure of Major Drive Store; Dowlen Store to Open Next Day. KBTV4 (September 12, 2006). Retrieved on 8 October 2006.
- ^ H-E-B store opens Wednesday. The Beaumont Enterprise (September 26, 2006). Retrieved on 8 October 2006.
- ^ Vintage Park Houston. Vintage Park Houston. Retrieved on 11 December 2006.
- ^ H-E-B to start work on Kyle store. Austin American-Statesman (November 1, 2006). Retrieved on 2 November 2006.
- ^ H-E-B Plus to open Friday in Leander Austin American-Statesman, February 22, 2007.
- ^ a b Doors opening at second H-E-B Plus. MySA.com (November 1, 2006). Retrieved on November 2, 2006.
- ^ H-E-B adding more Plus stores. MySA.com (September 27, 2006). Retrieved on 8 October 2006.
- ^ site of 2nd giant H-E-B. Corpus Christi Caller-Times (December 28, 2006). Retrieved on 29 March 2007.
- ^ Pearland retail center lands H-E-B as anchor. Houston Business Journal (July 12, 2006). Retrieved on 8 October 2006.
- ^ H-E-B Plus is coming to the North Side. MySA.com (July 8, 2006). Retrieved on 8 October 2006.
- ^ H-E-B converting North Side store to Plus. MySA.com (March 14, 2007). Retrieved on 1 April 2007.
- ^ The Largest Private Companies. Forbes.com (November 9, 2006). Retrieved on 15 November 2006.
- ^ H-E-B collaborates on new Hawaiian health drink venture, San Antonio Business Journal, December 21, 2006.
- ^ Business Briefs, MySA.com, December 23, 2006.
- ^ Austin's first Maui Wowi store opens in HEB, Austin Business Journal, February 12, 2007.
- ^ H-E-B to convert former Albertson's, expand other area stores. Austin American Statesman (September 12, 2007). Retrieved on 12 September 2007.
- ^ HEB buys Safeway warehouse/Chain expands in northwest area, Houston Chronicle, July 30, 1993.
- ^ H-E-B courts Latinos with new Houston store. MySA.com (October 5, 2006). Retrieved on 8 October 2006.
- ^ H-E-B plus! Store Locations. HEB. Retrieved on 9 July 2007.
[edit] External links
- H-E-B Official website
- FundingUniverse.com Additional H-E-B history
- Forbes.com Forbes' 2004 List of World's Richest People: Charles Butt
