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Exploring H-E-B: Operational Expertise

heb store

H. E. Butt Grocery Company BB #:106490 is a well-run and highly recognized part of the national grocery industry, even though its reach is firmly within the Lone Star State and northern Mexico.

And it does business it’s own way.

“On the operational side of the house, H-E-B wins by taking ownership and keeping many functions close to home,” says retail expert Carol Spieckerman, president of Spieckerman Retail in Bentonville, AR.

“It prefers to own its store locations and maintains control over distribution, trucking, and warehouses, not to mention manufacturing most of its own private brands rather than outsourcing. Store design, construction, and worker training are all managed in-house, a rarity in the retail world that allows H-E-B to own its own destiny.

“Even so, the company isn’t myopically insular,” Spieckerman continues. “Its acquisition of crowdsourced delivery service Favor in 2018 is an example of H-E-B looking beyond its walls to ramp up specific capabilities. H-E-B has stayed on top of convenience by branching out into curbside pickup and delivery, while it innovates in the digital space and continually refines its mobile outreach.”

The Favor acquisition marked the first time H-E-B had purchased another company, and the move was named “Deal of the Year” by Grocery Dive.

In addition to Favor, H-E-B continues to work with Instacart and Shipt. In August 2019, the retailer expanded its relationship with Instacart, enabling it to offer grocery delivery to customers without a bricks-and-mortar H-E-B-owned store in the neighborhood, which includes much of the Dallas-Fort Worth area.

In December 2019, H-E-B launched a new My H-E-B mobile app, allowing customers to order groceries for home delivery or curbside pickup—services previously available only on the website. Customers can also gather coupons and scan them in one step at checkout through the app.

The company’s commitment to staying ahead on the technology front is underscored by its creation of two new technology centers.

An 81,000-square-foot technology center opened in Austin in 2019 and also serves as the home base for Favor. Plans are also underway for a 170,000-square-foot tech center at H-E-B’s corporate campus in San Antonio, to be completed in 2022.

In August 2020, H-E-B announced it would expand its partnership with Dayton, OH-based StrataCache, which provides customer shopping data and insights, to focus on various technology upgrades.

Among the solutions already in testing or being implemented in stores are cashierless checkout, sustainability features, autonomous delivery, and back-end and logistics improvements.

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.