Retail surges even as oil falters
Though energy-related industries have had job losses, consumer-driven sectors are still in expansion mode
HOUSTON’s biggest employers grew last year, thanks to a surge in population from the oil and gas boom that enveloped the region over the past few years.
The boom slumped along with oil prices during the second half of 2014. About a third of the Top 100 employers reported job losses, in a Chronicle survey of employers, and half of those were in energy and related industries. But consumer-driven sectors ramped up their operations to take advantage of the population growth.
During the last decade, Houston added an average of about 125,000 residents each year, said Patrick Jankowski, senior vice president of research for the Greater Houston Partnership. That figure includes those who move to Houston (minus the ones who leave town) as well as natural growth (births minus deaths).
But last year, the area added 156,000 newcomers, including 98,000 who came from other places to seek their fortunes.
“You would expect that, as hot as the job market has been,” Jankowski said. “It helped when Forbes said we were the coolest city in America. Whether it was or was not true, it got people to take a look at us.”
To handle the influx of new Houstonians, grocery stores have popped up in the outlying suburban areas as well as close-in neighborhoods. So have new hospitals and medical clinics. Restaurants have been expanding to keep pace. And it can seem as if there is a new mattress store in nearly every strip center.
Houston may be an oil and gas town, but that strength now is among merchants, health care providers and hospitality services. And no one can come close to matching Wal-Mart for size.
The giant retailer topped the Chronicle list of biggest employers again this year with its 32,000 local employees. That’s 7 percent more than a year earlier.
Some of it reflects population growth in Houston, Wal-Mart spokeswoman Anne Hatfield said, pointing to the two new supercenters it opened last year, one in Baytown and another on Wayside.
Wal-Mart is also trying to catch up after not expanding much in Houston during the late 1990s and early 2000s, she said.
The retailer is also shifting some of its focus to smaller
stores like its neighborhood markets, which are one-quarter the size of one of its typical supercenters.
“It’s all about convenience,” Hatfield said, and they are designed so customers can easily park and run in for fresh produce, a prepackaged lunch or health and beauty items.
While the concept isn’t new — Wal-Mart launched the small-store format in 1988 — it’s expanding it in Houston. Four out of five of Wal-Mart’s new stores this year are neighborhood markets in Pearland, Atascocita, Cypress and Katy.
12% more employees
Traditional grocery stores have also been trying to cater to the population growth as they add stores.
H-E-B, which moved up the Chronicle list this year to the No. 2 spot, has been on a growth trajectory in Houston. The chain has 21,471 local employees, an increase of 12 percent compared with the previous year.
It’s new “rooftops” and population growth, said Scott McClelland, president of H-E-B Houston. H-E-B opened seven new stores since October.
Houston is the chain’s fastest-growing market, McClelland said. And it is gaining speed to garner 25 percent of the local grocery market, he said, edging up close behind market leader Wal-Mart.
“We’re the Avis of the food industry,” he said, referring to the car rental company whose longtime slogan, referencing its usual second-place status in the industry, was, “We try harder.”
Think bigger for Texas
H-E-B got a foothold in Houston in the early 1990s by building small “pantry” stores, a concept McClelland calls a mistake for Texans, who like things bigger. As the chain has expanded, H-E-B has devised a variety of stores that appeal to the city’s diverse population.
Some shoppers are focused on convenience, so they prefer neighborhood stores, while others are willing to drive across town to shop for unique items at Central Market. For bargain hunters, H-E-B launched Joe V Smart Shop. And products are tailored to specific ethnic neighborhoods.
“It would be easier if we built the same store everywhere,” he said.
As much as H-E-B has expanded, there are still plenty of places McClelland wants to build, including the Heights, Meyerland and Richmond/ Rosenberg. He’d like a big store in Bellaire.
Household goods
Food sellers aren’t the only ones scouting for real estate. Companies that supply basic household goods are also trying to meet growing population demand by setting up new locations.
Mattress Firm has been on an expansion tear, and part of that stems from the new engineers, geoscientists and construction workers who have flocked to Houston and its farflung suburban areas.
The growth in mattresses and other consumer products is the byproduct of the oil and gas boom, said Ken Murphy, co-chief operating officer of Mattress Firm. When people move to town or graduate from college, they need mattresses, he said.
With its familiar orange and white roof, Whataburger is also capitalizing on the growth of Houston.
The San Antonio-based chain of fast-food restaurants has 6,569 employees, a 20 percent one-year jump.
Stephanie Bright, corporate director of field human resources and recruiting, credits the increase in new employees to four new locations last year in Cypress, Kemah, Baytown and Houston. So far this year, Whataburger has added another three restaurants.
Depending on size and location, each new place hires 30 to more than 100 employees, said Bright, who went through employee training like everyone else, which included learning how to cook a burger, wrap it and serve it.
Health needs
Health care providers have been busy adding employees to accommodate all the new rooftops that dot Houston’s landscape.
Memorial Hermann Health System has 20,055 employees, 8 percent more than it had the previous year.
The growth in employment reflects a massive building boom, including new office towers, patient rooms and freestanding emergency centers across the region.
Fort Bend County growth
In some communities Memorial Hermann is expanding its footprint; in Sugar Land, it’s doubling the number of hospital beds by adding a six-story patient tower and adding a second office medical building.
The expansion, at the intersection of Texas 99 and U.S. 59, reflects the population growth of Fort Bend County, chief facilities officer Marshall Heins said.
Residential development in Katy has spurred the health care provider to double the size of its Katy campus by adding surgical suites and labor and delivery units, and expanding emergency services.
It’s also moving into new communities such as Cypress with last year’s purchase of 32 acres near the intersection of U.S. 290 and Grand Parkway near Fairfield Village.
It took a while for the housing development to take off, but now that it has, Memorial Hermann has a new office building and “convenient care center,” which is a fully licensed emergency room. It will break ground on an 80bed hospital later this year.
It has plenty of space to add two, three or four office towers along with a new inpatient tower as the area adds more households, Heins said.
“We’re very bullish on the growth in Houston,” he said.
“It helped when Forbes said we were the coolest city in America. Whether it was or was not true, it got people to take a look at us.” Patrick Jankowski, Greater Houston Partnership