The grocery wars never let up
KROGER, Walmart and H-E-B once again dominate Houston’s hyper-competitive grocery market.
The companies are ranked Nos. 1, 2 and 3, respectively, on this year’s Chronicle 100 list of the region’s largest grocers by the number of store locations. Kroger has 110 local stores, Walmart has 106, and H-E-B has 94.
These grocery giants dwarf other players such as Aldi, Fiesta Mart and Sam’s Club, which have 36, 34 and 17 locations, respectively. Randalls, which has long struggled to keep pace with its larger competitors, is closing its third location since April, bringing its total store count to 26.
“It’s very, very competitive between H-E-B, Kroger and Walmart,” Ed Wulfe, chairman and CEO of Houston-based commercial real estate firm Wulfe & Co., said. “They’re constantly competing head-to-head with each other.”
Supermarket chains are engaged in a fierce battle over families’ grocery dollars as Houston’s population has grown in recent years. Much of this turf war is now being waged online as shoppers increasingly embrace e-commerce.
Kroger, which maintained its top ranking from last year, is rolling out its “ClickList” online grocery ordering service to 29 more stores in the Houston area this year. The Cincinnati-based company currently offers curbside pickup service at 65 local stores and home delivery service at 33 locations.
The company recently launched “Scan, Bag and Go” in the Houston area. The technology allows customers to use a wireless handheld scanner or their smartphone to scan and bag groceries as they shop in the store.
The grocer also struck a deal with United Kingdombased technology company Ocado to use automated robots to pick, sort and pack online grocery orders in distribution centers.
“Our customers tell us they want multiple ways to shop,” Kroger spokeswoman Sparkle Anderson said in an email. “We are committed to leveraging a combination of insights, advanced technology and our digital platform to give our customers the ability to shop when and how they want to make their lives easier. Less time running errands means more time with family.”
Walmart, which launched online grocery pickup in the Houston area nearly three years ago, is expanding the service to 175 stores across Texas this year. The Bentonville, Ark.-based retailer launched its grocery home delivery service in Houston in May as part of a national rollout to reach customers in 100 markets.
The discount giant also allows customers to pay for groceries both online and in-store using a smartphone app.
“Customers today want to be able to shop how, when and where they want,” Walmart spokeswoman Anne Hatfield said. “Saving time is now as important as saving money.”
H-E-B is also becoming a major competitor in the e-commerce space. The San Antonio-based grocery retailer in February acquired Favor Delivery, an Austin-based delivery startup that shuttles online orders from restaurants and other stores directly to consumers.
The acquisition allows H-E-B to more quickly expand its grocery delivery service. The chain offers curbside pickup and home delivery services at about half of its Houstonarea stores. It plans to have curbside pickup services at 200 stores nationally by the end of the year.
The grocer is also piloting H-E-B Go, a self-checkout mobile app at three Texas stores. These ecommerce innovations will be overseen by Jag Bath, Favor’s CEO, who was recently named H-E-B’s chief digital officer.
Even as grocers broaden their online presence, they are also investing in their brick-and-mortar assets, broadening their local footprint while improving the shopping experience at existing stores.
H-E-B plans to open six area stores in 2018 totaling nearly 550,000 square feet, according to Wulfe & Co. The grocer is venturing into urban neighborhoods, such as the Heights and Bellaire, and those to the east, such as Mont Belvieu.
Kroger, which opened seven stores and remodeled 18 others in 2017, doesn’t plan on opening any new area stores this year but said it will continue to update its stores. Walmart is opening two local stores this year, one in Fulshear, the other in the Beaumont area, and plans to remodel 12 stores in the Houston area.
“This competition makes us better and keeps us on our toes,” Walmart’s Hatfield said. “At the end of the day, the consumers benefit from this competition.”