H-E-B, Grocery Game Strong
I recently returned to Austin, Texas, my hometown, where I made several trips to H-E-B. If you aren’t from Texas, you probably aren’t familiar with H-E-B, but it is the predominant player in grocery (and more recently, general merchandise) in South Texas, headquartered in San Antonio. According to the NRF, it’s the 20th largest retailer in the US by revenue (larger than Kohls and Rite-Aid!), with annual revenue of $21.94B, so it is a store that you should pay close attention to even if there isn’t one where you live.
I grew up with H-E-B and even worked there for a brief stint as a cashier and bagger and can’t sing enough praises about the store. I’ve lived on the East and West coasts and none of the grocery stores there could match the magic of H-E-B. Grocery shopping is one of my hobbies, I could spend hours in a grocery store checking out new products (yes I know this is weird, part of why grocery delivery services never appealed much to me as a customer, why order online when you can have so much fun shopping?). Most non-Texans are confused when I wax poetic about H-E-B (who really ❤ their grocery store?), but trust me, it really is a special store and I’ll explain a few of the reasons below :).
H-E-B takes advantage of the Texas-sized shelves by stocking a dazzling array of products. You’ll find all the classics alongside new and exciting brands in every product category. Each time I shop at H-E-B I often stumble upon new delicious treasures. Whoever is doing the buying at H-E-B, they have earned my respect :].
Another way that H-E-B excels in selection is through localization. Stores in areas with a high ethnic minority population have a broader selection of ethnic groceries while those in high-income zips have expanded assortments of organic goods and high-end alcohol. This approach differs from typical chain stores that more or less offer the same selection of groceries at every store to simplify the supply chain. While there have been some efforts though to bring more localization at a few chain stores, I’ve never seen it done as well as H-E-B does it. Localization is costly from a management and supply chain perspective, but as a customer, I believe it is worth it. I’m always excited to walk into a new H-E-B because there is always the possibility to discover a new product.
Finally as a segway to the next point, another component of selection is that H-E-B also offers best-in-class private label selection (private label=H-E-B branded products).
Do you hate how typical private label products are inferior/cheaper versions of the “real thing”? While the pricing is competitive, the typical private label packaging is not aesthetically compelling and the flavor/quality lacks that special branded touch. Well that’s not usually the case at H-E-B, where I find that the flavor/quality sometimes exceeds that of the branded version.
The branding is also compelling with a strong Texas influence and some good, better, best stories (Hill Country Fare, H-E-B brand, Central Market) offered as well. Five stars for the branding team at H-E-B! There’s probably some component of branding affecting the perception of taste, the generic Oreo cookie could probably taste better if the packaging/branding were better.
Finally, H-E-B not only offers cheaper private label versions of branded products, but they actually innovate and create their own unique products that the big CPG brands don’t offer. This is relatively rare in retail/grocery where the usual strategy is to fast follow what the big brands are doing and spending R&D dollars on.
H-E-B’s strong private label offerings build loyalty and lock-in consumers, there’s no other place to buy those addicting H-E-B Intense Flavored Cheese Balls than H-E-B, so you’ll definitely be back.
H-E-B’s pricing is consistent and cheap on both branded and private label products. You don’t have to coupon like crazy or constantly watch for sales to not feel like you’re getting ripped off.
But if you are hankering to coupon, H-E-B offers a wide variety of in-store coupons available both in paper format and on your phone. The in-store coupons are an effective marketing tactic, my understanding is that studies have shown that having physical coupons available to customers significantly increases conversion rates. It’s strangely satisfying to hand over a stack of coupons to the cashier even if I only saved a few bucks on things I probably never intended to buy on my trip.
H-E-B, I’ll always be thinking of you in New York when I go grocery shopping. Cheers. Hope you make your way out of Texas soon, the rest of the US doesn’t know what they’re missing out on :).