It may sound like a bold statement coming from a grocery store chain, but regional retailer H-E-B has used fiscal smarts and an unyielding devotion to serving the customer to gain a lock on the Texas and Mexico comestibles market.
To the rest of the country, HEB might sound more like “huh?” But in Texas, HEB is a household name.
There’s one around just about every corner you drive by, lurking next to each major thoroughfare, a shining 24 hour beacon at your favorite cross street. Those glowing red and white letters mean competitive, low prices and a genuine commitment to their other slogan “Because People Matter.”
What’s an H-E-B?
At the turn of the 20th century, Florence Butt opened a small grocery store out of her house in Kerrville, Texas. But it wasn’t until her son, Howard Edward Butt, took over the business in the 1920s that H-E-B took on its now familiar moniker. It was also Howard who set out to expand his mother’s business into the neighboring communities.
During the 1950s, when supermarkets began to spring up everywhere, H-E-B began to consolidate into the newer, more expansive format. In the 70s, Howard passed the corporation on to his son Charles, who diversified H-E-B, expanding into communities across Texas, across the border and into new realms, including upscale groceries, specialized ethnic stores and the all-encompassing megastore.
Along the way, what kept H-E-B strong (roughly 18 million dollars of revenue in 2012) and competitive with large chains like Wal-Mart and Kroger has been their commitment to keeping customers happy.
How It’s Done in Texas
Simple methods have catapulted H-E-B to the top of the grocery store food chain: from keeping prices low to creating quality “own-brand” products to encouraging staff to exude Texas hospitality to all their customers. Each customer is greeted with a friendly face and a kind word. Management is directed to keep as many registers open as possible. Courteous employees direct traffic to express or regular lanes, depending on basket size. Managers roam the aisles, keeping themselves readily available to offer a hand or solve a problem.
This commitment extends to employees as well. H-E-B offers fair wages, affordable health care and discounted store-brand products. The company is well aware that employees often become lifelong customers.
Getting into the Community
While its in-store efforts are impressive, the company has also made a strong effort to bond with its local communities. Since the mid-thirties, through the H. E. Butt Foundation, H-E-B has donated 5 percent of their pre-tax profits to national and local charities.
Recently, when a gas plant exploded in West, Texas, they campaign to donate time, money, food and water to survivors in the impacted areas.
People Really Do Matter
By treating customers, employees and communities with dignity and respect, H-E-B has become the twelfth largest privately held company in the United States (according to Forbes). Their commitment to customer service has allowed for strong growth and solid profits, even during the recent recession. By backing up their words with actions, H-E-B has created strong branding and developed a loyal customer base throughout Texas and northern Mexico, ensuring their prosperity.