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H.E. Butt Grocery Company
Company typePrivate
IndustryRetail (Grocery)
Founded1905
FounderFlorence Butt
Headquarters
San Antonio, Texas
,
United States
Area served
Texas and Mexico
Key people
Charles Butt, Chairman & CEO
Craig Boyan[1],President
ProductsBakery, dairy, deli, frozen foods, gasoline, general grocery, meat, pharmacy, produce, seafood, snacks
RevenueIncrease $15.50 billion USD (2008)
Number of employees
70,000 (2008)
Websitewww.heb.com

H.E. Butt Grocery Company (abbreviated H-E-B) is a privately held San Antonio, Texas-based supermarket chain with more than 315 stores throughout Texas and northern Mexico.[2][3] The company also operates Central Market, an upscale organic and fine foods retailer.[4]

H-E-B ranked No. 11 on Forbes' 2006 list of "America's Largest Private Companies."[5] Supermarket News ranked H-E-B No. 13 in the 2008 "Top 75 North American Food Retailers."[6] Based on 2005 revenues, H-E-B is the twenty-seventh largest retailer in the United States.[7] It donates 5% of pretax profits to charity.[4]

History

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H-E-Buddy, the mascot of H-E-B

The company was founded on November 26, 1905 when Florence Butt opened the C.C. Butt Grocery Store on the ground floor of her family home in Kerrville, Texas.[8] In 1919, Howard Edward Butt, Florence's 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.[9]

Historically, the company is known for its charitable donations, with 5% of annual pretax earnings given to causes in the communities they operate in, including education and food banks.[10][11] In December 2006, Chairman Charles Butt gave $1 million to the McNay Art Museum for the new Jane and Arthur Stieren Center for Exhibitions.[12]

Operations

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Central Market

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Central Market store in north Austin
Main article: Central Market (Texas)

In 1994, H-E-B introduced its Central Market concept in Austin. Central Market offers an organic and international food selection, including a European-style bakery 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, San Antonio, and Southlake.[13]

Store formats

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H-E-B operates four different formats of stores that introduce general merchandise and elements of the Central Market concept: The Woodlands Market in The Woodlands in Montgomery County, 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, and in 2009, the H-E-B in Beecaves was remodeled. HEBs' Alon Market opened on October 17, 2008 in San Antonio.[14] In October 2007, HEB opened its Cypress Market store, located at the intersection of Highway 290 and Barker-Cypress. In November 2007, the 112,000 sq ft (10,400 m2) Vintage Market store opened in northwest Harris County in greater Houston.[15]

H-E-B Plus

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H-E-B Plus store in Laredo, Texas

In 2004, the company launched three (in Austin, Corpus Christi, and Waco) H-E-B Plus! stores with an expanded focus on non-food categories, such as entertainment and other general merchandise. The company added three additional locations in 2005 (Corpus Christi, Round Rock and San Antonio). The 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.

Several other locations were later added, including stores in Flour Bluff (Corpus Christi), Beaumont, Katy, Killeen, Cypress, Victoria, Kyle,[16] Laredo, Leander,[17] Mission, Rio Grande City, San Juan, San Antonio,[18], Midland, and Pearland.[19][20][21].

Mi Tienda

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In 2006, H-E-B opened Mi Tienda in South Houston (adjacent to Pasadena) — a 63,000-square-foot (5,900 m2) Latino-themed store.[22][23]

Mi Tienda in South Houston

Manufacturing

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The company operates several manufacturing facilities in Texas, including one of the largest milk and bread processing plants in the Southwest.[24] 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","H-E-B", "H-E-Buddy", "Hill Country Fare", "H-E-B Creamy Creations" ice cream, "H-E-B Mootopia" milk, and "H-E-B Fully Cooked."

In-store leasing

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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,[18] Panda Express, Chase Bank Flexi-Compras, Auntie Anne's Pretzel, T-Mobile, Pocket, Wells Fargo, and Maui Wowi.[25][26][27]

Accusations of Predatory Pricing

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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.[28] In 1998, H-E-B paid Centeno Super Markets $6.5 million to settle a predatory pricing lawsuit.[29]

Markets

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Austin

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Austin 25 H-E-B (#476) at the Tech Ridge Shopping Center in Austin

H-E-B operates more than 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 Lane in Round Rock, all were closed on October 21, 2007, and were reopened as H-E-B stores between early December 2007 and March 2008.[30] Recently the HEB on Riverside drive was replaced with a brand new 20 million dollar, 102,000 square foot HEB Plus! store. [31] Also the company has expressed its want to establish a store in downtown Austin[32]

East Texas

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H-E-B first entered the East Texas market with its H-E-B Pantry Foods in Beaumont, Port Arthur, Carthage, Crockett, Conroe, Huntsville, 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."

Houston

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Houston's Buffalo Market H-E-B (#51)
Houston's Blackhawk H-E-B (#49)

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.[33] Beginning in 2001, H-E-B shuttered or expanded and converted many of 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. Many of these stores were closed with larger replacement stores built nearby, while others were simply rebranded "H-E-B" with the store size unchanged, albeit with the addition of a small bakery/deli hybrid.

North Texas

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H-E-B initially entered the Dallas/Fort Worth Metroplex with the 2001 opening of a Central Market in Fort Worth. With the addition of three more Central Market locations in the area and the recent announcement of a new distribution center in Temple,[34] H-E-B plans to bring their core stores to this super-competitive market with the introduction of a store in Burleson.[35] A few communities to the south of the Metroplex, Cleburne, Corsicana, Ennis and Waxahachie, already support one store each. 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.

San Antonio

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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.[5] 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.

South Texas

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H-E-B Mercado Grande in Laredo, 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 because of the closure of Albertsons LLC and Kroger stores in the past decade. There are several locations throughout the Lower 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, one in Port Isabel, and one in Uvalde.

West Texas

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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.[36]

Louisiana

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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, though the expansion was, in comparison, short lived and ultimately did not catch on with either planners nor the community, thus the company closed its sole Louisiana store in 2003.

Mexico

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H-E-B Plaza in Nuevo Laredo, Mexico

As of mid 2006, H-E-B has operations in five Mexican states: Coahuila (4 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.[6]. 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.

Proposed Expansion

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H-E-B in Piedras Negras, Mexico

References

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  1. ^ http://www.mysanantonio.com/business/local/Boyan_to_ascend_to_H-E-B_presidency.html
  2. ^ H.E. Butt Grocery Co. Profile
  3. ^ "HEB TV Spots Reinforce Commitment to Helping Shoppers Save". Progressive Grocer. 2010-02-07.
  4. ^ a b Charles Butt & family Forbes 400 October 6, 2008 Forbes
  5. ^ a b "H-E-B still 11th-largest private U.S. company". MySA.com. November 15, 2006. Retrieved 15 November 2006.
  6. ^ a b 2007 Top 75 North American Food Retailers, Supermarket News, Last accessed February 24, 2007.
  7. ^ Top 100 Retailers: The Nation's Retail Power Players (PDF), Stores, July 2006.
  8. ^ "History". Company Info. H-E-B. Retrieved 2010-03-12.
  9. ^ "H. E. Butt Grocery Company". Companies. Hoover's. Retrieved 2010-03-11.
  10. ^ Moravec, Eva Ruth (2009-03-28). "H-E-B recognizes 40 Texans vying for education awards". San Antonio Express News. San Antonio: Hearst Newspapers. Retrieved 2010-03-12.
  11. ^ Barkhurst, Ariel (2009-12-20). "Thousands enjoy H-E-B Feast of Sharing". San Antonio Express News. San Antonio: Hearst Newspapers. Retrieved 2010-03-12.
  12. ^ Butt gives $1 million for McNay expansion, MySA.com, December 18, 2006.
  13. ^ "Central Market to Bring Argentina to Texas in Celebration of South American Bicentennial" (Press release). BusinessWire. 2010-03-03. Retrieved 2010-03-11.
  14. ^ Alon Town Centre - Fulcrum Property Group, Inc
  15. ^ "Vintage Park Houston". Vintage Park Houston. Retrieved 11 December 2006.
  16. ^ "H-E-B to start work on Kyle store". Austin American-Statesman. November 1, 2006. Retrieved 2 November 2006. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  17. ^ H-E-B Plus to open Friday in Leander Austin American-Statesman, February 22, 2007.
  18. ^ a b "Doors opening at second H-E-B Plus". MySA.com. November 1, 2006. Retrieved November 2, 2006.
  19. ^ "Pearland retail center lands H-E-B as anchor". Houston Business Journal. July 12, 2006. Retrieved 8 October 2006. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  20. ^ "H-E-B Plus is coming to the North Side". MySA.com. July 8, 2006. Retrieved 8 October 2006.
  21. ^ "H-E-B converting North Side store to Plus". MySA.com. March 14, 2007. Retrieved 1 April 2007.
  22. ^ "H-E-B courts Latinos with new Houston store". MySA.com. October 5, 2006. Retrieved 8 October 2006.
  23. ^ "Vendor E-1.pdf." Texas Department of State Health Services. Accessed June 16, 2008.
  24. ^ "The Largest Private Companies". Forbes.com. November 9, 2006. Retrieved 15 November 2006.
  25. ^ H-E-B collaborates on new Hawaiian health drink venture, San Antonio Business Journal, December 21, 2006.
  26. ^ Business Briefs, MySA.com, December 23, 2006.
  27. ^ Austin's first Maui Wowi store opens in HEB, Austin Business Journal, February 12, 2007.
  28. ^ "A Century of Shopping: H-E-B hits 100". MySanAntonio.com. November 22, 2005. Retrieved 15 June 2007.
  29. ^ "The Paradox of Predatory Pricing" (PDF). Cornell Law Review. November 1, 2005. p. 16. Retrieved 15 June 2007.
  30. ^ "H-E-B to convert former Albertson's, expand other area stores". Austin American Statesman. September 12, 2007. Retrieved 12 September 2007.
  31. ^ http://www.statesman.com/business/new-h-e-b-on-east-riverside-being-319218.html
  32. ^ http://www.statesman.com/business/as-h-e-b-expands-in-central-texas-201098.html
  33. ^ HEB buys Safeway warehouse/Chain expands in northwest area, Houston Chronicle, July 30, 1993.
  34. ^ Temple to get H-E-B distribution center, Waco Tribune, February 12, 2009.
  35. ^ Council approves first step in rezoning for HEB grocery store, City of Burleson, September 13, 2007.
  36. ^ "H-E-B plus! Store Locations". HEB. Retrieved 9 July 2007.
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Category:Privately held companies of the United States Category:Companies based in San Antonio, Texas Category:Supermarkets of the United States Category:Hypermarkets of the United States Category:Supermarkets of Mexico Category:Companies established in 1905

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