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H-E-B

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HEB Grocery Company, LP
Company typePrivate
IndustryGrocery retail
FoundedNovember 26, 1905; 118 years ago (1905-11-26) (as C.C. Butt Grocery Store)
Kerrville, Texas, U.S.
FounderFlorence Butt
HeadquartersSan Antonio, Texas, U.S.
Number of locations
370 (2015)
Area served
Texas, Nuevo Leon, Tamaulipas, Coahuila, San Luis Potosi, Guanajuato and Aguascalientes.
Key people
Charles Butt, Chairman and CEO
Craig Boyan,[1] President and COO
ProductsBakery, dairy, deli, frozen foods, gasoline, general grocery, meat, pharmacy, produce, seafood, snacks
ServicesAuto health, fuel, ticket sales, utilities, and licenses
RevenueIncrease $21+ billion (2013)
Number of employees
86,000 (2015)
SubsidiariesH-E-B Mexico
Websitewww.HEB.com
H-E-B headquarters

HEB Grocery Company, LP (stylized as H-E-B), also known as H-E-B Grocery Stores, is an American privately held supermarket chain based in San Antonio, Texas, with more than 350 stores throughout the U.S. state of Texas, as well as in northeast Mexico.[2][3] The company also operates Central Market, an upscale organic and fine foods retailer.[4] As of 2013, the company has a total revenue surpassing $20 billion USD (2013).[5] H-E-B ranked No. 15 on Forbes' 2014 list of "America's Largest Private Companies."[6] H-E-B was named Retailer of the Year in 2010 by Progressive Grocer.[7] Supermarket News ranked H-E-B No. 13 in the 2008 "Top 75 North American Food Retailers."[8] Based on 2014 revenues, H-E-B is the twentieth largest retailer in the United States.[9] It donates 5 percent of pre-tax profits to charity.[10] It has been labeled a religious company; until 1976, it was closed on Sundays and did not sell alcohol.[11]

History

The company was founded on November 26, 1905 when Florence Butt opened the C.C. Butt Grocery Store on the ground floor of her family home in Kerrville, Texas.[12] In 1919, Howard Edward Butt, Florence's youngest son, took over the store upon his return from World War I. Shortly after becoming owner of his mother's small store, Howard tried four expansions into Central Texas, including one in Junction, all of which failed. Finally in 1927, Howard launched a successful second store in Del Rio, Texas followed by the purchase of three grocery stores in the Lower Rio Grande Valley. The first initials of Howard E. Butt became the name of the store.[13]

Charles, the younger son of Howard E. Butt, became president of the H.E. Butt Grocery Company in 1971. As of 2016, Charles Butt is chairman and CEO of HEB Grocery Company, LP, having grown the business from annual sales of $250 million in 1971 to $13 billion in 2006. In 2010, Craig Boyan was named H-E-B's President and COO.[14] In 2011, the company was #12[15] on Forbes' list of largest privately held companies; H-E-B was for many years, until Dell went private in 2013, the largest privately held company in Texas.[16]

Operations

Houston's Buffalo Market H-E-B (#51)

Headquartered in Downtown San Antonio, H-E-B operates more than 300 stores in over 150 communities across Texas.[17][18] As of late 2010, its operations serve approximately "55-plus" percent of the Texas market, according to Progressive Grocer,[19][20] with primary Texas markets including the Corpus Christi, San Antonio, Austin, Laredo and Houston metro areas. The company does business in 5 different retail formats: general H-E-B stores, Central Market, H-E-B Plus, Mi Tienda and Joe V's Smart Shop. In 2010, the company announced plans to build 19 new stores in Texas.[21] H-E-B opened its first store outside of Texas in 1996, a 24,000-square-foot (2,200 m2) H-E-B Pantry store in Lake Charles, Louisiana; though the expansion was, in comparison, short lived and ultimately did not catch on with either planners or the community. The H-E-B Pantry store format was discontinued in 2000,[22] and the company closed its sole Louisiana store in 2003. Recently H-E-B offered consumers the opportunity to vote on possible designs for new stores as they expand into new communities.[23]

The company operates several manufacturing facilities in Texas, including one of the largest milk and bread processing plants in the Southwest.[24] 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","H-E-B", "H-E-Buddy", "Hill Country Fare", "H-E-B Creamy Creations" ice cream, "H-E-B Mootopia" milk, and "H-E-B Fully Cooked."

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,[25] Panda Express, Chase Bank, Flexi-Compras, Auntie Anne's Pretzel, AT&T, Gold & Silver Buyers, Wells Fargo, and Maui Wowi.[26][27][28]

The H-E-B corporate offices have more authority over decisionmaking at individual H-E-B outlets in San Antonio than Foodarama does over individual La Fiesta chains in San Antonio. Because H-E-B is a regional chain, Elizabeth Allen of the San Antonio Express-News said that it is more "nimble" than national grocery companies such as Albertsons.[29]

Central Market

Central Market store in central Austin
Main article: Central Market (Texas)

In 1994, H-E-B introduced its Central Market concept in Austin. Based in Austin, Central Market offers an organic and international food selection, including a European-style bakery 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, San Antonio, and Southlake.[30] H-E-B operates four different formats of stores that introduce general merchandise and elements of the Central Market concept: The Woodlands Market in The Woodlands in Montgomery County, 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 West Lake Hills, and in 2009, the H-E-B in Bee Caves was remodeled. H-E-B's Alon Market opened on October 17, 2008 in San Antonio.[31] In October 2007, H-E-B opened its Cypress Market store, located at the intersection of Highway 290 and Barker-Cypress. In November 2007, the 112,000 sq ft (10,400 m2) Vintage Market store opened in northwest Harris County in greater Houston.[32] In November 2012, H-E-B opened its second Cypress store, Fairfield Market, located at the intersection of Highway 290 and Mason Road to serve the master-planned community of Fairfield and surrounding areas.[33]

In July 2015, the Market concept was expanded as a new Spring Creek Market was opened in southern Montgomery County in Spring, Texas on Rayford Road adjacent to the new Texas State Highway 99 to serve the expanding suburb of Houston.[34]

H-E-B Plus!

H-E-B Plus store in Laredo, Texas

In 2004, the company launched three (in Austin, Corpus Christi, and Waco) H-E-B Plus! stores with an expanded focus on non-food categories, such as entertainment and other general merchandise. The company added three additional locations in 2005 (Corpus Christi, Round Rock and San Antonio). The 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.

Several other locations were later added, including stores in Flour Bluff, Corpus Christi, Bastrop, Beaumont, Belton, Boerne, Katy, Killeen, Cypress, Victoria, Kyle,[35] Laredo, Leander,[36] Mission, Rio Grande City, San Juan, San Antonio,[25] Midland, and Pearland,[37][38][39] and a new one being built and on schedule to be opened February 2013 in Copperas Cove.[40]

Mi Tienda

Mi Tienda in northern Houston

In 2006, H-E-B opened Mi Tienda in South Houston (adjacent to Pasadena) in Greater Houston - a 63,000-square-foot (5,900 m2) Latino-themed store.[41][42] H-E-B now has other Mi Tienda locations.There is another Mi Tienda off of Little York and U.S. Route 59. Mi Tienda, which means "my store" in Spanish, includes a panaderia that offers homestyle Mexican baked goods; a tortilleria, where employees make fresh tortillas; and a carniceria filled with marinated cuts of chicken, beef and pork. In addition, Mi Tienda also houses the Cocina restaurant, which serves tacos, tortas, carnitas, tamales and chicharrones, and an Aguas Frescas Bar that offers freshly made drinks.[citation needed]

Joe V's Smart Shop

Joe V's Smart Shop in unincorporated northeast Harris County, Texas

In 2010, H-E-B opened Joe V's Smart Shop, a brand featuring discount items modeled after discount grocer Aldi.[43] The first location opened was a 54,690-square-foot (5,100 m2) store located in northwest unincorporated Harris County, Texas,[44] near northwest Houston. The store format is smaller compared with a full service H-E-B store but double the size of an H-E-B Pantry store. A larger, second location with a 65,714-square-foot (6,100 m2) space opened in December in northeast unincorporated Harris County, Texas. As of 2016, there are seven Joe V's stores.[45] The "Joe V" name was based on the name of an executive of the company who was involved in the development of this store format.[46]

Mexico

Store in Piedras Negras

H-E-B crossed the $1 billion mark annual sales mark in Mexico in 2012.[47]

Main article: H-E-B Mexico

Litigation

In the mid-1980s, local grocery chains Handy Andy and Centeno joined a lawsuit against H-E-B citing unfair pricing practices.[48] H-E-B eventually settled the suit out of court with Centeno in 1998 for $6.5 million and with Handy Andy for an undisclosed settlement amount.[49][50]

H-E-B has paid $12 million to settle a whistleblower lawsuit accusing the San Antonio-based grocery chain of Medicaid fraud. Since at least 2006, according to the suit, H-E-B allegedly submitted to Texas Medicaid inflated prices on thousands of claims for prescriptions it filled so the company could obtain higher reimbursements than allowed.[51]

Charitable activity

Historically, the company is known for its charitable donations, with 5 percent of annual pretax earnings given to causes in the communities it operates in, including education and food banks.[52] An annual charitable program maintained by H-E-B since 2000 is the Excellence in Education Awards, in which teachers, administrators and schools in Texas are recognized with awards totaling $500,000 in contributions in 2009.[53]

H-E-B coordinated donations to relief efforts in the wake of a fertilizer plant fire and explosion in West, Texas. The company donated $50,000 to the American Red Cross and launched a check stand campaign benefitting the organization to get the community involved in the relief effort. The company said in a news release 100 percent of the donations from the campaign will support the American Red Cross’s disaster relief efforts. H-E-B also activated its emergency response units, sending the H-E-B Eddie Garcia Mobile Kitchen and water tanker to West, including donations of meals and water to the victims and first responders.[54]

References

  1. ^ Hendricks, David (23 January 2010). "New president is named at H-E-B". San Antonio Express News. Retrieved 12 November 2010.
  2. ^ "Supermarket News Company Profile: HEB Grocery Company". Supermarket News.
  3. ^ "HEB TV Spots Reinforce Commitment to Helping Shoppers Save". Progressive Grocer. Stagnito Media. 2010-02-07. Retrieved 2010-04-14.
  4. ^ "Forbes 400: Charles Butt". Forbes Magazine.
  5. ^ "HE Butt Grocery on the Forbes America's Largest Private Companies List". Forbes.
  6. ^ "America's Largest Private Companies". forbes.com. Retrieved 10 November 2014.
  7. ^ Vaughan, Vicki (2010-10-06). "H-E-B is Retailer of the Year". San Antonio Express-News. Hearst Newspapers. Retrieved 2010-11-02.
  8. ^ 2007 Top 75 North American Food Retailers Archived 2016-05-11 at the Wayback Machine, Supermarket News, Last accessed February 24, 2007.
  9. ^ Top 100 Retailers Chart 2015 Archived 2016-06-10 at the Wayback Machine National Retail Federation.
  10. ^ "H-E-B Kicks-off New Year with Renewed Commitment to Customer Savings by Slashing Prices on More Than 5,000 Products" (Press release). Business Wire. 2010-01-06. Retrieved 20 July 2016.
  11. ^ Nisen, Max (June 17, 2013). "Big U.S. companies you might not know are religious". Business Insider. Yahoo! Finance. Retrieved October 29, 2013.
  12. ^ "History". Company Info. H-E-B. Retrieved 2010-03-12.
  13. ^ Kleiner, Diana J. "H-E-B". The Handbook of Texas Online. Texas State Historical Association. Retrieved 8 November 2010.
  14. ^ "Craig Boyan to Lead H-E-B as New President and COO". BusinessWire (Press release). San Antonio: BusinessWire. 2010-01-23. Retrieved 2010-11-02.
  15. ^ DeCarlo, Scott; Murphy, Andrea D. (16 November 2011). "America's Largest Private Companies". Forbes.
  16. ^ "H. E. Butt Grocery Company". Companies. Hoover's. Retrieved 2010-03-11.
  17. ^ "H-E-B appoints new president, reorganizes senior management". San Antonio Business Journal. 25 January 2010. Retrieved 17 December 2010.
  18. ^ "Find a Store". Retrieved 14 November 2010.
  19. ^ Major, Meg; Dudlicek, James (October 2010). "Retailer of the Year: The Heart of Texas". Progressive Grocer. Retrieved 17 December 2010.
  20. ^ Hendricks, David. "New president is named at H-E-B". Retrieved November 14, 2010.
  21. ^ Hendricks, David; Sunday, effective. "New President Named at HEB". Retrieved 14 November 2010.
  22. ^ Rutledge, Tanya. "H-E-B closing door on pantry concept Archived 2016-10-21 at the Wayback Machine." Houston Business Journal. Friday July 28, 2000. Retrieved on August 25, 2010.
  23. ^ Kaplan, David (28 October 2010). "H-E-B going extra mile on new Montrose store". Houston Chronicle. Retrieved 14 November 2010.
  24. ^ "The Largest Private Companies". Forbes.com. November 9, 2006. Retrieved 15 November 2006.
  25. ^ a b "Doors opening at second H-E-B Plus". MySA.com. November 1, 2006. Retrieved November 2, 2006.
  26. ^ H-E-B collaborates on new Hawaiian health drink venture[permanent dead link], San Antonio Business Journal, December 21, 2006.
  27. ^ Briefs[permanent dead link], MySA.com, December 23, 2006.
  28. ^ Austin's first Maui Wowi store opens in HEB Archived 2007-03-10 at the Wayback Machine, Austin Business Journal, February 12, 2007.
  29. ^ Allen, Elizabeth. "In the shadow of a grocery giant A thrifty strategy La Fiesta caters to Hispanic market and keeps overhead to a minimum[permanent dead link]." San Antonio Express-News. Tuesday December 31, 2002. Business 1E. Retrieved on December 1, 2011.
  30. ^ "Central Market to Bring Argentina to Texas in Celebration of South American Bicentennial" (Press release). BusinessWire. 2010-03-03. Retrieved 2010-03-11.
  31. ^ Vaughan, Vicki (16 October 2008). "H-E-B Alon Market set to open". San Antonio Express News. Retrieved 12 November 2010.
  32. ^ Jackson, Kim (6 November 2007). "H-E-B Vintage Market to open Nov. 14". The Houston Chronicle. Retrieved 12 November 2010.
  33. ^ "Fairfield Market H-E-B". 2013. Retrieved 23 April 2013.
  34. ^ Spring Creek Market H-E-B Archived 2016-02-13 at the Wayback Machine H-E-B. Retrieved 2 August 2015.
  35. ^ "H-E-B to start work on Kyle store". Austin American-Statesman. November 1, 2006. Retrieved 2 November 2006. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)[dead link]
  36. ^ Plus to open Friday in Leander[permanent dead link] Austin American-Statesman, February 22, 2007.
  37. ^ Dawson, Jennifer (July 12, 2006). "Pearland retail center lands H-E-B as anchor". Houston Business Journal. Retrieved 8 October 2006. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  38. ^ "H-E-B Plus is coming to the North Side". MySA.com. July 8, 2006. Retrieved 8 October 2006.
  39. ^ "H-E-B converting North Side store to Plus". MySA.com. March 14, 2007. Retrieved 1 April 2007.
  40. ^ "H-E-B on target for February opening in Copperas Cove". "Killeen Daily Herald". September 3, 2012. Retrieved 14 December 2012. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  41. ^ "H-E-B courts Latinos with new Houston store". MySA.com. October 5, 2006. Retrieved 8 October 2006.
  42. ^ "Vendor E-1.pdf." (Archive) Texas Department of State Health Services. Accessed June 16, 2008.
  43. ^ Kaplan, David. "New H-E-B concept is discount-minded Archived 2010-12-21 at the Wayback Machine."Houston Chronicle. April 20, 2010. Retrieved on May 4, 2010.
  44. ^ Joe V's Smart Shop.[permanent dead link] Retrieved on May 4, 2010.
  45. ^ Joe V’s Smart Shop Opens Store #7[permanent dead link] Joe V's Smart Shop. Retrieved 20 July 2016.
  46. ^ Wollam, Allison (9 May 2010). "H-E-B launches new concept despite naming spat with Trader Joe's". Houston Business Journal. Retrieved 17 December 2010.
  47. ^ H-E-B expanding in Texas and crime-ridden Mexico Archived 2016-08-18 at the Wayback Machine Houston Chronicle. 18 January 2012.]
  48. ^ "A Century of Shopping: H-E-B hits 100". MySanAntonio.com. November 22, 2005. Retrieved 15 June 2007.
  49. ^ "The Paradox of Predatory Pricing" (PDF). Cornell Law Review. November 1, 2005. p. 16. Retrieved 15 June 2007.
  50. ^ "A Century of Shopping: H-E-B hits 100". MySanAntonio.com. November 22, 2005. Retrieved 15 June 2007.
  51. ^ "Grocer pays $12 million in whistleblower case".
  52. ^ Barkhurst, Ariel (2009-12-20). "Thousands enjoy H-E-B Feast of Sharing". San Antonio Express News. San Antonio: Hearst Newspapers. Retrieved 2010-03-12.
  53. ^ Moravec, Eva Ruth (2009-03-28). "H-E-B recognizes 40 Texans vying for education awards". San Antonio Express News. San Antonio: Hearst Newspapers. Retrieved 2010-03-12.
  54. ^ Riemenschneider, Pamela (2013-04-22). "HEB coordinates donations to West, Texas". The Packer. Vance Publishing. Retrieved 2013-04-23.
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