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Exploring H-E-B: A Lone Star standout

Regional retailer H-E-B, BB #:106490 founded in Kerrville, TX in 1905 as the C.C. Butt Grocery Store, has grown into a powerhouse that dominates the grocery landscape in much of Texas.

Unlike other grocers that look to geographic expansion for growth, H-E-B continues to focus on South and Central Texas, and northeastern Mexico. The retailer typically opens four or five stores per year, both in its existing markets and in new, nearby markets.

The privately held company, headquartered in San Antonio, has more than 400 stores in Texas and Mexico. Its relatively small regional footprint makes allows the company to be agile: it can anticipate trends, respond quickly to changes in the market, and localize its approach.

Don Johnsey, founder of JD Johnsey Associates in Plano, TX, an independent consultancy to the grocery retail industry, is a former H-E-B executive and believes the grocer’s size and exclusive focus on Texas is an advantage in many regards. It is not only specifically attuned to customers’ needs, but able to nimbly adjust to market fluctuations.

The regional chain consistently scores at or near the top of annual rankings: dunnhumby’s Retailer Preference Index named H-E-B the best overall U.S. grocery store in 2020, knocking Trader Joe’s from the top slot, though it was bested by Amazon in the 2021 rankings, coming in second.

Top ratings have also come from Food & Wine magazine, the American Customer Satisfaction Index, and Winsight.

The Lone Star standout has also been lauded for its pandemic response, scoring highest in the nation in a Bond Brand Loyalty survey conducted in June 2020.

Measuring consumer satisfaction with Covid-19 precautions, H-E-B scored 80 percent in satisfaction—versus 61 percent for Costco and Walmart, and 59 percent for Publix and Kroger.

These satisfaction rates were accomplished even as online orders quadrupled during the early months of the pandemic.

A more recent accolade was being named “Grocer of the Year” for 2020 by Grocery Dive, not only for overall excellence, but H-E-B’s Covid response, stating, “The Texas grocer’s pandemic response this spring showed it could move mountains, while its response in recent months has proven its agility and deep understanding of its shoppers.”

This is a feature from the Texas Supplement to the March/April 2021 issue of Produce Blueprints Magazine. Click here to read the full supplement.