H-E-B

Infobox_Company
company_name = H.E. Butt Grocery Company
company_
company_type = Private
company_slogan = Here Everything's Better, El verdadero lugar del ¡ahorro! (The Real Place of Savings) (Mexico)
foundation = 1905
industry = Grocery store
location = San Antonio, Texas
key_people = Charles Butt, Chairman & CEO; Martin Otto, CFO; Bob Loeffler, COO | num_employees = 60,000+
industry = Retail (Grocery)
products = Bakery, dairy, deli, frozen foods, gasoline, general grocery, meat, pharmacy, produce, seafood, snacks
revenue = $12.4 billion USD (2005)
homepage = [http://www.heb.com www.heb.com]

H.E.Butt Grocery Company (abbreviated H-E-B) is a privately held San Antonio, Texas-based supermarket chain with 310 stores throughout Texas and northern Mexico. [ [http://supermarketnews.com/profiles/he_butt_grocery_company/ H.E. Butt Grocery Co. Profile ] ] H-E-B ranked No. 11 on Forbes' 2006 list of "America's Largest Private Companies" based on 2005 revenue of $12.4 billion.cite web | publisher=MySA.com | title=H-E-B still 11th-largest private U.S. company | url=http://www.mysanantonio.com/business/stories/MYSA111606.02E.Forbes_HEB.24e9bee.html| date=November 15, 2006 | accessdaymonth=15 November | accessyear=2006] "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. [http://www.supermarketnews.com/sns-top-75/ 2007 Top 75 North American Food Retailers] , "Supermarket News", Last accessed February 24, 2007.] Based on 2005 revenues, H-E-B is the twenty-seventh largest retailer in the United States. [ [http://www.stores.org/pdf/06%20JULY%20TOP%20100.pdf Top 100 Retailers: The Nation's Retail Power Players (PDF)] , "Stores", July 2006.]

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 convert|60|mi|km|0 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% of annual pretax earnings given to civic and charitable causes in the communities they operate in, including education and food banks. In December 2006, Chairman Charles Butt gave $1 million to the McNay Art Museum for the new Jane and Arthur Stieren Center for Exhibitions. [ [http://www.mysanantonio.com/business/stories/MYSA121906.1B.McNay.2f523f3.html Butt gives $1 million for McNay expansion] , MySA.com, December 18, 2006.]

H-E-B is also environmentally driven, focusing on recycling and conservation, and in 1999 began converting their Houston distribution fleet to run on liquefied 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.

Operations

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.

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. HEBs' "Alon Market" is expected to open on October 17th, 2008 in San Antonio. [ [http://www.alontowncentre.com/ Alon Town Centre - Fulcrum Property Group, Inc ] ]

In 2006, the two largest stores in the Houston region debuted when new convert|125000|sqft|m2|-2|abbr=on stores in unincorporated western Harris County (near Katy) [http://www.hcnonline.com/site/news.cfm?newsid=16942620&BRD=1574&PAG=461&dept_id=532254&rfi=6] and Beaumont opened. [cite web | publisher=KBTV4 | title=H-E-B Announces Closure of Major Drive Store; Dowlen Store to Open Next Day
url=http://www.kbtv4.tv/news/default.asp?mode=shownews&id=12451 | date=September 12, 2006 | accessdaymonth=8 October | accessyear=2006] [cite web | publisher="The Beaumont Enterprise" | title=H-E-B store opens Wednesday | url=http://www.beaumontenterprise.com/site/news.cfm?newsid=17245482&BRD=2287&PAG=461&dept_id=512504&rfi=6 | date=September 26, 2006 | accessdaymonth=8 October | accessyear=2006] 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 HEB's stores to feature a Maui Wowi franchise, while the company opened their first Houston-region "Plus!" store in Pearland on September, 2007, and 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 HEB stores.

[http://www.hcnonline.com/site/news.cfm?BRD=1574&dept_id=533558&newsid=18672624&PAG=461&rfi=9 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 convert|112000|sqft|m2|-2|abbr=on "Vintage Market" store will open at the intersection of State Highway 249 and Louetta in unincorporated northwest Harris County in greater Houston. [cite web | publisher=Vintage Park Houston | title=Vintage Park Houston
url=http://www.vintageparkhouston.com/ | accessdaymonth=11 December | accessyear=2006]

H-E-B Plus!

In 2004, the company launched three (in Austin, San Juan and Waco) "H-E-B Plus" stores, convert|109000|sqft|m2|-2|sing=on 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 convert|161000|sqft|m2|-2|abbr=on. 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), Beaumont, Katy, Killeen, Cypress, Kyle, [cite web | publisher="Austin American-Statesman" | title=H-E-B to start work on Kyle store | url=http://www.statesman.com/business/content/business/stories/other/11/01/1heb.html | date=November 1, 2006 | accessdaymonth=2 November | accessyear=2006] Laredo, Leander, [ [http://www.statesman.com/business/content/business/stories/employment/02/22/22leander.html H-E-B Plus to open Friday in Leander] "Austin American-Statesman", February 22, 2007.] Mission, Rio Grande City, San Antonio,cite web | publisher=MySA.com | title=Doors opening at second H-E-B Plus | url=http://www.mysanantonio.com/business/stories/MYSA110106.01E.HEB.2741a35.html | date=November 1, 2006 | accessmonthday=November 2 | accessyear=2006] and Victoria. H-E-B has plans for several additional "H-E-B Plus" stores statewide, [cite web | publisher=MySA.com | title=H-E-B adding more Plus stores | url=http://www.mysanantonio.com/business/stories/MYSA092806.01E.BIZhebplus.2857d6d.html | date=September 27, 2006 | accessdaymonth=8 October | accessyear=2006] including stores in, [cite web | publisher= "Corpus Christi Caller-Times" | title=site of 2nd giant H-E-B | url=http://www.caller.com/ccct/local_news/article/0,1641,CCCT_811_5241831,00.html | date=December 28, 2006 | accessdaymonth=29 March | accessyear=2007] Midland, Pearland, [cite web | publisher="Houston Business Journal" | title=Pearland retail center lands H-E-B as anchor | url=http://houston.bizjournals.com/houston/stories/2006/07/10/daily24.html | date=July 12, 2006 | accessdaymonth=8 October | accessyear=2006] and San Antonio. [cite web | publisher=MySA.com | title=H-E-B Plus is coming to the North Side | url=http://www.mysanantonio.com/business/stories/MYSA070806.01D.HEBPlus.d2a0a5.html | date=July 8, 2006 | accessdaymonth=8 October | accessyear=2006] [cite web | publisher=MySA.com | title=H-E-B converting North Side store to Plus | url=http://www.mysanantonio.com/business/stories/MYSA031507.1E.H.E.B.plus.2e2e964.html | date=March 14, 2007 | accessdaymonth=1 April | accessyear=2007]

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.

Private label manufacturing

The company operates several manufacturing facilities in Texas, including one of the largest milk and bread processing plants in the Southwest. [cite web | publisher=Forbes.com | title=The Largest Private Companies | url=http://www.forbes.com/lists/2006/21/biz_06privates_HE-Butt-Grocery_S854.html| date=November 9, 2006 | accessdaymonth=15 November | accessyear=2006] 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.Fact|date=February 2007

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, Panda Express, Chase Bank Flexi-Compras, Auntie Anne's Pretzel, T-Mobile, Pocket, Wells Fargo, and Maui Wowi. [ [http://sanantonio.bizjournals.com/sanantonio/stories/2006/12/18/daily31.html?surround=lfn H-E-B collaborates on new Hawaiian health drink venture] , "San Antonio Business Journal", December 21, 2006.] [ [http://www.mysanantonio.com/business/stories/MYSA122306.02D.bizbriefs.26be4bf.html Business Briefs] , MySA.com, December 23, 2006.] [ [http://austin.bizjournals.com/austin/stories/2007/02/12/daily5.html Austin's first Maui Wowi store opens in HEB] , "Austin Business Journal", February 12, 2007.]

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. [cite web | publisher=MySanAntonio.com | title=A Century of Shopping: H-E-B hits 100| url=http://www.mysanantonio.com/business/stories/MYSA112005.1R.HEBmain.1b9c8838.html|date=November 22, 2005| accessdaymonth=15 June | accessyear=2007] In 1998, H-E-B paid Centeno Super Markets $6.5 million to settle a predatory pricing lawsuit. [cite web | publisher=Cornell Law Review | title=The Paradox of Predatory Pricing| url=http://organizations.lawschool.cornell.edu/clr/91_1/Crane_Cornell_Law_Review_91_1.pdf|Page=16 |date=November 1, 2005| accessdaymonth=15 June | accessyear=2007]

Markets

=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. [cite web | publisher=Austin American Statesman | title=H-E-B to convert former Albertson's, expand other area stores| url=http://www.statesman.com/news/content/business/stories/other/09/14/0914heb.html|date=September 12, 2007| accessdaymonth=12 September | accessyear=2007]

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, 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

[
thumb|right|Former_H-E-B_Pantry_in_The Woodlands in unincorporated Montgomery County, Texas] H-E-B first entered the Houston market with its "H-E-B Pantry Foods" stores in 1992. These limited-assortment stores were typically convert|30000|sqft|m2|-3 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 convert|119000|sqft|m2|-2|sing=on 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. [ [http://www.chron.com/CDA/archives/archive.mpl?id=1993_1144252 HEB buys Safeway warehouse/Chain expands in northwest area] , "Houston Chronicle", July 30, 1993.] 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 convert|78000|sqft|m2|-2 in size, more than double the size of pantry stores. In 2006, H-E-B opened "Mi Tienda" in South Houston (adjacent to Pasadena) — a convert|63000|sqft|m2|-2|sing=on Latino-themed store. [cite web | publisher=MySA.com | title=H-E-B courts Latinos with new Houston store | url=http://www.mysanantonio.com/business/stories/MYSA100606.01C.BIZhebhouston.29c7539.html | date=October 5, 2006 | accessdaymonth=8 October | accessyear=2006] [" [http://www.dshs.state.tx.us/wichd/vo/vendor_e-i.pdf Vendor E-1.pdf] ." "Texas Department of State Health Services". Accessed June 16, 2008.]

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, Corsicana, 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.

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. 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

.

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. [cite web | publisher=HEB| title=H-E-B plus! Store Locations | url=http://www.heb.com/hebplus/plusLocations.jsp | accessdaymonth=9 July | accessyear=2007]

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.. 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

*Aguascalientes
*Durango
*Jalisco
*Michoacán
*Puebla
*Queretaro
*State of Mexico
*Veracruz
*Coahuila

Louisiana

H-E-B opened its first store outside of Texas in 1996 — a convert|24000|sqft|m2|-2|sing=on 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.

References

External links

* [http://www.heb.com H-E-B] Official website
** [http://www.hebplus.com H-E-B Plus!]
** [http://www.hebmexico.com H-E-B Mexico]
** [http://www.hebphoto.com H-E-B Online Digital Photo Printing]
* [http://www.fundinguniverse.com/company-histories/HE-Butt-Grocery-Company-Company-History.html FundingUniverse.com] Additional H-E-B history
* [http://www.forbes.com/finance/lists/10/2004/LIR.jhtml?passListId=10&passYear=2004&passListType=Person&uniqueId=W4TW&datatype=Person Forbes.com] Forbes' 2004 List of World's Richest People: Charles Butt
* [http://www.jobsatheb.com H-E-B HOUSTON Manufacturing, Warehouse & Transportation]