H-E-B finally expanding to Dallas area.
At long last, Dallas-fort Worth is getting its first two H-E-BS.
The San Antonio-based company plans to open a store at the northeast corner of Legacy Drive and Main Street in Frisco and another at the southwest corner of Preston Road and Spring Creek Parkway in Plano. Both are expected to open in the fall of 2022.
H-E-B opened its first Central Market store in Dallas-fort Worth in 2001 and operates half a dozen such locations in the area, but none of its namesake stores.
“We’ve been studying it for a long time. The DFW metroplex isn’t new to us from a company perspective,” said Juan-carlos Rück, executive vice president of the North West food/drug division at H-E-B. “We just think now is a good time. We think there’s a great opportunity for us to come serve this market with our H-E-B brand and that format.”
H-E-B has been buying land in the area for years, prompting handwringing about when it would finally open a flagship store. The company operates namesake locations on the area’s edges, in cities including Burleson, Cleburne and Waxahachie.
“Any meeting that we have at H-E-B, the number one most-asked question is,
‘When are you going to DFW?’ ” said Scott Mcclelland, president of food and drug at H-E-B. “We think we’ve got a good format to bring. We know that we’ve got good people and we know that there’s demand from so many people who have lived south of DFW, and we think we can fill a niche in that market that isn’t being filled right now.”
The population of the Dallas-fort Worth metro area is more than 7.5 million and is growing rapidly, and the area is attracting companies from out-of-state.
H-E-B “cannot afford to ignore” that growth, said Venky Shankar, research director at Texas A&M University’s Center for Retailing Studies.
During the coronavirus pandemic, grocers have seen sales surge as people eat at home more, said Craig Rosenblum, a Dallas resident and vice president of industry transformation at research and consulting firm Inmar Intelligence.
In the past, grocery chains vied for customers by opening brick-and-mortar stores, he said. Now, shoppers are also buying groceries online for pickup or home delivery.
“The shopping experience has changed dramatically,” Rosenblum said. “Walmart could be everywhere. Amazon could be everywhere. Kroger could be everywhere. Tom Thumb could be everywhere.”
“I think H-E-B finally said, ‘You know, we could be everywhere too,’ ” he said.
Texas pride
The company is the undisputed grocery king of South Texas and has been expanding its reach in Houston, where it commands the largest market share. It is investing in its digital offerings and opened a hub in Austin in 2019, which serves as the headquarters of Favor Delivery and brings together H-E-B’S Austin-based technology employees in one place.
But in North Texas, the supermarket scene is more diversified. Walmart, Costco, Kroger, Albertsons, Aldi, Trader Joe’s, Sam’s Club, Whole Foods Market, Target, Dollar General and Sprouts Farmers Market are among retailers operating there.
“We cover basically the gamut of almost every form of brick-and-mortar retail,” Rosenblum said. “Over the years (market) share just keeps shifting around.”
But the quality of H-E-B’S private label products, its pricing and shoppers’ experience with the layout of the stores and with friendly employees will stand out, he said. Plus, the company taps into Texas pride.
“It is a Texas-based company, and Texans are always Texas first before they’re anything else,” he said. “They’ve had stores all around us. Finally coming into the metroplex is providing the Dallas-fort Worth shopper with a Texas hometown proud grocer versus the other big national chains.”
‘My H-E-B’
H-E-B began opening large stores in Houston in 2003 and learned it was crucial to tailor stores to “speak to the clientele,” Mcclelland said. Each city and submarket is different, and the company spends time researching those nuances.
The stores in Plano and Frisco will feature products local to the area.
“Oftentimes you hear people talk about, ‘Well, at my H-E-B,’ ” Mcclelland said. “One of the reasons that they talk about ‘their HE-B’ is that their H-E-B is uniquely different in how it’s merchandised to one that’s on the other side of town.”
H-E-B takes a measured approach to expanding and is fiercely competitive when it does. The company operates more than 420 stores in Texas and Mexico and employs more than 137,000 workers, making it one of Texas’ largest private employers.
“Experts in the industry know they have the resources to expand in all the surrounding states,” said David Livingston, a supermarket analyst and founder of DJL Trust/djl Research. “But they are conservative and methodical with their growth.”
Another advantage: Unlike some of its competitors, H-E-B is privately-owned and not beholden to Wall Street, Livingston added. It has built a loyal fan base and is likely to be a formidable presence in Dallas-fort Worth.
“H-E-B, with their unique Tex-mex appeal, (devoted) employees and strong marketing execution, should be able establish itself and eventually become the market share leader,” Livingston said.