September 29, 2006
Plus Stores Add Up to Huge Increases for H-E-B
It’s not exactly a hard sales figure, but when H-E-B spokesperson Dya Campos was asked by the San Antonio Express-News to compare the difference between the sales of a new H-E-B Plus store on the South Side of the city to the conventional H-E-B it replaced, she said it was “huge.”
The Plus store format, H-E-B’s direct response to supercenters is proving to be a big hit with consumers and the supermarket chain is looking to build up to 12 more over the next couple of years.
The store on San Antonio’s South Side is 170,000 square-feet and it offers furniture, entertainment and gaming products, expanded party, beauty and baby sections and a coffee shop. The store also leases space to a RediClinic, a jeweler and a nail and pedicure shop.
Outside in the lot, the store pumps gas and has a car wash.
H-E-B continues to tinker with the Plus format with a new store opening in San Antonio at the intersection of Loop 1604 and Potranco Road. That store, scheduled to open on Nov. 1, will feature more lawn and garden products.
Discussion Questions: H-E-B created its Plus concept to take supercenters head on and win. Will H-E-B achieve its goal with this format? What makes H-E-B
Plus different from other big box stores that sell groceries?
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The only way we will know for sure if this concept is working is when H-E-B starts building more of them. Right now, no one seems to know except H-E-B themselves. One area where we do know H-E-B will have a huge advantage is with its employees. H-E-B would be the Holy Grail for most Wal-Mart employees. Therefore H-E-B will deliver on customer service, without a doubt.
H-E-B is doing the right thing by delivering a hypermarket concept store which is a “one-stop” shopping center for their customers. This will make H-E-B a destination shopping point, rather than just a grocery store. The more times that a shopper returns to H-E-B, the better the odds that they will spend more dollars at the store. Furthermore, by including more items, which consumers want, H-E-B will increase the amount of time and exposure that consumers will have for each shopping experience in the store. This increases the “ring” from each consumer, while driving the consumer back to the store again and again because the diversity of selection they discover upon each visit. So long as H-E-B keeps they stores clean and well-stocked, prices competitive and customer service high, this concept is certain to be a success!
You have to walk this store to understand the big differences and the experiences that they have built into the Plus format. The most notable difference starts with service. They have very knowledgeable, helpful department managers who understand how to “connect” with their shoppers. They have taken the “store within a store” concept to the whole next level, so when you’re in the seafood market, you feel like you’re on the docks buying fresh seafood. Same feelings hold true for the other departments. I was equally impressed with bakery, deli, etc…
The store manager really understands the clientele in this store, and you can see and hear the pride in THEIR H-E-B from every team member in this store. Formats can and will be copied, but lasting success centers on experience and connecting with shoppers in a personal way. THESE GUYS GET IT!
For the niche customer demographic, this is a very welcome format. Having toured this design recently, it was obvious that the merchandising minds behind the product assortment “get it” in this market. Best of all, the customer can easily park, find a tailored market basket to fit her family’s needs, pay comparative prices to a supercenter on staple items, and avoid the hassles of a crowded big box mass retailer. Neighborhood Markets are not too far behind, though. As long as H-E-B continues to fill in the gaps that Wal-Mart misses in very customized regions such as south Texas, they should prove to be a formidable competitor.
H-E-B is one of the best run retailers. Undoubtedly they’ll figure out if the Plus concept will have a reasonable return on investment. If it does, it’s likely to hurt smaller independents, not Target, Wal-Mart, or Costco.
Biggest reason they will be successful: they’re local. H-E-B is locally owned meaning they understand the consumer far better than Wal-Mart ever will be able to. Being local also allows them to be a more integral part of the San Antonio community which allows them to play very effectively off of the anti-Wal-Mart attitude that exists with many mid-scale consumers.
This is another positive step by a major retailer in this market. Following on from Food Lion, with the introduction of the new banners, it’s a clear sign that retailers are focusing on the customer.
As with most major initiatives, only time will identify success. If H-E-B and Food Lion continue to open additional stores in line with this strategy, then I think others will have to get on the bandwagon.
The biggest challenge that retailers face as they add more banners and introduce customer centric strategies, is the additional work load required. Assortment, Price, Supply-Chain and Space Planning processes need to become more granular. This is realistic with a small amount of stores, but larger retailers simply cannot achieve this to the scale required manually.
Automation of key optimization processes within retailer is becoming a priority.
H-E-B doesn’t make many mistakes. The company receives the same respect in my industry as far better-known chains such as Costco and Trader Joe’s for knowing the business and investing enough to do it right and offer the highest quality it can at the right price. I would never bet against them.
Lessee (that’s a Walt Kelly term). Bigger store, brand-new facility, more stuff, more categories, and extreme attention and focus from the corporate office yields a “huge” increase in sales. Who’d a thunk it (another Walt Kelly term)?
Every store operates at near-peak performance during their grand opening. New is new and old is tired. There are horses for courses. Lessee if this H-E-B steed is a stallion or a gelding.
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The only way we will know for sure if this concept is working is when H-E-B starts building more of them. Right now, no one seems to know except H-E-B themselves. One area where we do know H-E-B will have a huge advantage is with its employees. H-E-B would be the Holy Grail for most Wal-Mart employees. Therefore H-E-B will deliver on customer service, without a doubt.
H-E-B is doing the right thing by delivering a hypermarket concept store which is a “one-stop” shopping center for their customers. This will make H-E-B a destination shopping point, rather than just a grocery store. The more times that a shopper returns to H-E-B, the better the odds that they will spend more dollars at the store. Furthermore, by including more items, which consumers want, H-E-B will increase the amount of time and exposure that consumers will have for each shopping experience in the store. This increases the “ring” from each consumer, while driving the consumer back to the store again and again because the diversity of selection they discover upon each visit. So long as H-E-B keeps they stores clean and well-stocked, prices competitive and customer service high, this concept is certain to be a success!
You have to walk this store to understand the big differences and the experiences that they have built into the Plus format. The most notable difference starts with service. They have very knowledgeable, helpful department managers who understand how to “connect” with their shoppers. They have taken the “store within a store” concept to the whole next level, so when you’re in the seafood market, you feel like you’re on the docks buying fresh seafood. Same feelings hold true for the other departments. I was equally impressed with bakery, deli, etc…
The store manager really understands the clientele in this store, and you can see and hear the pride in THEIR H-E-B from every team member in this store. Formats can and will be copied, but lasting success centers on experience and connecting with shoppers in a personal way. THESE GUYS GET IT!
For the niche customer demographic, this is a very welcome format. Having toured this design recently, it was obvious that the merchandising minds behind the product assortment “get it” in this market. Best of all, the customer can easily park, find a tailored market basket to fit her family’s needs, pay comparative prices to a supercenter on staple items, and avoid the hassles of a crowded big box mass retailer. Neighborhood Markets are not too far behind, though. As long as H-E-B continues to fill in the gaps that Wal-Mart misses in very customized regions such as south Texas, they should prove to be a formidable competitor.
H-E-B is one of the best run retailers. Undoubtedly they’ll figure out if the Plus concept will have a reasonable return on investment. If it does, it’s likely to hurt smaller independents, not Target, Wal-Mart, or Costco.
Biggest reason they will be successful: they’re local. H-E-B is locally owned meaning they understand the consumer far better than Wal-Mart ever will be able to. Being local also allows them to be a more integral part of the San Antonio community which allows them to play very effectively off of the anti-Wal-Mart attitude that exists with many mid-scale consumers.
This is another positive step by a major retailer in this market. Following on from Food Lion, with the introduction of the new banners, it’s a clear sign that retailers are focusing on the customer.
As with most major initiatives, only time will identify success. If H-E-B and Food Lion continue to open additional stores in line with this strategy, then I think others will have to get on the bandwagon.
The biggest challenge that retailers face as they add more banners and introduce customer centric strategies, is the additional work load required. Assortment, Price, Supply-Chain and Space Planning processes need to become more granular. This is realistic with a small amount of stores, but larger retailers simply cannot achieve this to the scale required manually.
Automation of key optimization processes within retailer is becoming a priority.
H-E-B doesn’t make many mistakes. The company receives the same respect in my industry as far better-known chains such as Costco and Trader Joe’s for knowing the business and investing enough to do it right and offer the highest quality it can at the right price. I would never bet against them.
Lessee (that’s a Walt Kelly term). Bigger store, brand-new facility, more stuff, more categories, and extreme attention and focus from the corporate office yields a “huge” increase in sales. Who’d a thunk it (another Walt Kelly term)?
Every store operates at near-peak performance during their grand opening. New is new and old is tired. There are horses for courses. Lessee if this H-E-B steed is a stallion or a gelding.