San Antonio, Texas-based regional supermarket chain H.E. Butt Grocery Company (H-E-B) plans to open one of its biggest stores yet on November 7 in Bunker Hill Village, Texas, which is a suburb of Houston.
The new 127,900 square foot store will be called H-E-B Bunker Hill Market. The mega-store will be a hybrid of the grocery chain's H-E-B supermarkets and its upscale Central Market formats.
H-E-B debuted its upscale Central Market format and first store in 2004. The stores are a combination traditional supermarket (in terms of product offering) with an upscale flair, along with being a natural and specialty foods store. Central Market stores also feature a vast array of in-store-made fresh, prepared foods, along with specialty wines, craft beers and international food and grocery products.
H-E-B's other banner and format are its H-E-B supermarkets, which are large full-service super or mega stores with an upscale flair.
The new H-E-B Bunker Hill Market set to open in three weeks in the city of the same name, will be a combination of both of these two formats.
The store will offer a full selection of supermarket essentials along with lots of non-foods and general merchandise products in its nearly 128,000 square feet.
The hybrid new mega-market in Bunker Hill will feature all of the upscale, natural and specialty departmental and products focus of its Central Market format. H-E-B has opened a number of such stores already in Texas.
For example, the store will feature a massive produce department featuring nearly 1,000 varieties of fresh fruits and vegetables. The fresh produce store-within-a-store also will feature fresh juices and sampling stations, among other upscale twists.
There will be an in-store artisan bakery which will include scores of varieties of in-store baked breads, pastries, cakes and other premium baked goods. The bakery also will include a coffee bar/cafe and other upscale touches.
The store's natural, organic, specialty, gourmet and international food and grocery products selection across all shelf-stable and perishable product categories will rival anything Whole Foods Market has in the market and most likely surpass what any other competing supermarket offers in the natural-organic products category.
The huge market also will have a wine cellar within its massive liquor department. That wine cellar will offer over 2,000 varieties of wines, according to an H-E-B spokesperson. The beer selection will feature everything from the big domestic and import national brands to craft beers from throughout the U.S. and the world.
The new 127,900 square foot store will be called H-E-B Bunker Hill Market. The mega-store will be a hybrid of the grocery chain's H-E-B supermarkets and its upscale Central Market formats.
H-E-B debuted its upscale Central Market format and first store in 2004. The stores are a combination traditional supermarket (in terms of product offering) with an upscale flair, along with being a natural and specialty foods store. Central Market stores also feature a vast array of in-store-made fresh, prepared foods, along with specialty wines, craft beers and international food and grocery products.
H-E-B's other banner and format are its H-E-B supermarkets, which are large full-service super or mega stores with an upscale flair.
The new H-E-B Bunker Hill Market set to open in three weeks in the city of the same name, will be a combination of both of these two formats.
The store will offer a full selection of supermarket essentials along with lots of non-foods and general merchandise products in its nearly 128,000 square feet.
The hybrid new mega-market in Bunker Hill will feature all of the upscale, natural and specialty departmental and products focus of its Central Market format. H-E-B has opened a number of such stores already in Texas.
For example, the store will feature a massive produce department featuring nearly 1,000 varieties of fresh fruits and vegetables. The fresh produce store-within-a-store also will feature fresh juices and sampling stations, among other upscale twists.
There will be an in-store artisan bakery which will include scores of varieties of in-store baked breads, pastries, cakes and other premium baked goods. The bakery also will include a coffee bar/cafe and other upscale touches.
The store's natural, organic, specialty, gourmet and international food and grocery products selection across all shelf-stable and perishable product categories will rival anything Whole Foods Market has in the market and most likely surpass what any other competing supermarket offers in the natural-organic products category.
The huge market also will have a wine cellar within its massive liquor department. That wine cellar will offer over 2,000 varieties of wines, according to an H-E-B spokesperson. The beer selection will feature everything from the big domestic and import national brands to craft beers from throughout the U.S. and the world.
There's also an in-store sushi bar and a huge gourmet cheese department ofering over 400 varieties of domestic and imported cheeses.
These are just a few examples of the upscale, natural-specialty and fresh foods focus the 127,900 square foot Bunker Hill Market will borrow from the company's Central Market format. Because of the store's size, it's really a full Central Market and H-E-B supermarket combined into one.
The mega-market, which the company spokesperson said will staff with a whopping 430 associates, also will feature a full-service pharmacy, a complete store-within-a-store floral department with delivery service, a gas station, car wash and a huge grilling-accessory shop featuring everything a consumer needs for backyard cooking and entertaining, which is big in Texas.
These are just a few examples of the upscale, natural-specialty and fresh foods focus the 127,900 square foot Bunker Hill Market will borrow from the company's Central Market format. Because of the store's size, it's really a full Central Market and H-E-B supermarket combined into one.
The mega-market, which the company spokesperson said will staff with a whopping 430 associates, also will feature a full-service pharmacy, a complete store-within-a-store floral department with delivery service, a gas station, car wash and a huge grilling-accessory shop featuring everything a consumer needs for backyard cooking and entertaining, which is big in Texas.
H-E-B just opened one of these mega-markets (about 128,000 square feet) in San Antonio last Friday in fact.
One of the key features of these stores is that the product mix is customized to the immediate trade area where the stores are located.
For example, the San Antonio store, called H-E-B Alon Market, has the largest kosher foods selection of any of the chain's stores to date because the affluent neighborhood ($90,000 in average annual income) it's located in and around has a high percentage of Jewish residents. The market also is located right across the street from the Jewish Community Center. According to an H-E-B spokesperson, the retailer consulted with members of the Jewish Community Center in picking its kosher foods product selection for the store.
H-E-B is one of the largest privately-held retailers in the United States. The 100 year old company has about 310 stores. of the 310 stores, 282 are located in Texas and 28 are located across the border in Mexico, which actually makes H-E-B one of the few U.S. based supermarket chains with an international presence. In Texas, its stores are in about 150 cities throughout the state. H-E-B currently has over 56,000 employees, according to the company spokesperson.
In its 2008 ranking of the top 75 food and grocery retailers in the U.S., the supermarket industry trade publication Supermarket News ranks H-E-B as the 14th-largest food and grocery retailer in the U.S., estimating the family-owned chain's sales at $13.5 billion annually. All but about 7.5% of those annual sales are in Texas. The 7.5% being from the grocer's 28 stores in Mexico.
H-E-B and the FTC's Whole Foods' category hegemony argument
To put things in perspective regarding the power of this 310-store Texas grocery chain, it's fellow Texas-based food retailer, supernatural grocer Whole Foods Market, Inc., ranks number 24 in the 2008 Supermarket News ranking, with annual sales of $6.6 billion and nearly the same number of stores, about 285 compared to 310.
This is impressive. After all, unlike Whole Foods Market, H-E-B benefits sales-wise from selling basic food and grocery products in all of its stores, while Whole Foods focuses on the natural, organic and premium categories.
On the other hand, Whole Foods is a national grocer with stores throughout the U.S., while H-E-B's annual gross sales (except for the 7.5% from its Mexico stores) are in the main based on doing business in just one state -- Texas.
Further, one of the major contributors to H-E-B's sales growth in recent years has been its Central Market upscale, natural-specialty format stores, along with the expanded selections of natural, organic, specialty and premium departments and products its adding in all of its supermarkets in Texas.
In fact, the inside of a Central Market store looks very much like the inside of a newer Whole Foods Market store -- upscale, full of natural and organic products, and stocked with fresh premium foods at every turn of the aisle.
As we wrote about in this October 19 piece, "Retail Memo: First Two Sprouts Farmers Market Stores Sprout in Colorado; Another Challenge to What The FTC Says is Whole Foods' Category Hegemony," the U.S. Federal Trade Commission (FTC) persists in arguing Whole Foods Market, Inc. with its acquisition of Wild Oats last year, is in a monopolistic position vis-a-vis the retailing of natural and organic products. the regulatory agency has set a February, 2009 meeting to next discuss the issue.
As we argue in the October 19 piece, and have written about in numerous other stories in Natural~Specialty Foods Memo, this argument from the FTC is pure folly.
We talked about the competitive heat Whole Foods Market is facing in the Colorado market in the October 19 piece.
We also mentioned how various retailers -- including H-E-B and United Supermarkets via its Market Street format, along with others -- are putting the heat on Whole Foods in the natural, organic and premium foods categories deep in the heart of Texas.
Further, we mentioned how fast-growing natural foods retail chains Sprouts Farmers Market and Sunflower Farmers Market have no entered Texas with their respective stores, which put an emphasis on discounting natural and organic products across all categories.
H-E-B has been opening other hybrid mega-store's like the one in San Antonio that opened on Friday which are similar to its Bunker Hill Market which is set to open on November 7 throughout Texas, along with opening new upscale Central Market supermarkets.
H-E-B is one of the largest privately-held retailers in the United States. The 100 year old company has about 310 stores. of the 310 stores, 282 are located in Texas and 28 are located across the border in Mexico, which actually makes H-E-B one of the few U.S. based supermarket chains with an international presence. In Texas, its stores are in about 150 cities throughout the state. H-E-B currently has over 56,000 employees, according to the company spokesperson.
In its 2008 ranking of the top 75 food and grocery retailers in the U.S., the supermarket industry trade publication Supermarket News ranks H-E-B as the 14th-largest food and grocery retailer in the U.S., estimating the family-owned chain's sales at $13.5 billion annually. All but about 7.5% of those annual sales are in Texas. The 7.5% being from the grocer's 28 stores in Mexico.
H-E-B and the FTC's Whole Foods' category hegemony argument
To put things in perspective regarding the power of this 310-store Texas grocery chain, it's fellow Texas-based food retailer, supernatural grocer Whole Foods Market, Inc., ranks number 24 in the 2008 Supermarket News ranking, with annual sales of $6.6 billion and nearly the same number of stores, about 285 compared to 310.
This is impressive. After all, unlike Whole Foods Market, H-E-B benefits sales-wise from selling basic food and grocery products in all of its stores, while Whole Foods focuses on the natural, organic and premium categories.
On the other hand, Whole Foods is a national grocer with stores throughout the U.S., while H-E-B's annual gross sales (except for the 7.5% from its Mexico stores) are in the main based on doing business in just one state -- Texas.
Further, one of the major contributors to H-E-B's sales growth in recent years has been its Central Market upscale, natural-specialty format stores, along with the expanded selections of natural, organic, specialty and premium departments and products its adding in all of its supermarkets in Texas.
In fact, the inside of a Central Market store looks very much like the inside of a newer Whole Foods Market store -- upscale, full of natural and organic products, and stocked with fresh premium foods at every turn of the aisle.
As we wrote about in this October 19 piece, "Retail Memo: First Two Sprouts Farmers Market Stores Sprout in Colorado; Another Challenge to What The FTC Says is Whole Foods' Category Hegemony," the U.S. Federal Trade Commission (FTC) persists in arguing Whole Foods Market, Inc. with its acquisition of Wild Oats last year, is in a monopolistic position vis-a-vis the retailing of natural and organic products. the regulatory agency has set a February, 2009 meeting to next discuss the issue.
As we argue in the October 19 piece, and have written about in numerous other stories in Natural~Specialty Foods Memo, this argument from the FTC is pure folly.
We talked about the competitive heat Whole Foods Market is facing in the Colorado market in the October 19 piece.
We also mentioned how various retailers -- including H-E-B and United Supermarkets via its Market Street format, along with others -- are putting the heat on Whole Foods in the natural, organic and premium foods categories deep in the heart of Texas.
Further, we mentioned how fast-growing natural foods retail chains Sprouts Farmers Market and Sunflower Farmers Market have no entered Texas with their respective stores, which put an emphasis on discounting natural and organic products across all categories.
H-E-B has been opening other hybrid mega-store's like the one in San Antonio that opened on Friday which are similar to its Bunker Hill Market which is set to open on November 7 throughout Texas, along with opening new upscale Central Market supermarkets.
H-E-B also recently started running television ads in the Texas market featuring the popular actress Eva Longoria, who is one of the stars of the television show Desperate Housewives and is a native of Texas. Mr. Longoria is a smart choice for H-E-B in that she appeals to the state's significant Hispanic or Latino population, as well as appealing to woman and men of all ethnic backgrounds, especially women (and men) who regularly watch the popular TV program.
The combination of H-E-B, United Supermarkets (Market Street), Wal-Mart (Supercenters, Sam's Club, Neighborhood Market supermarkets), Costco, Safeway Stores (Randall's banner) with its Lifestyle format -- all retailers with a major natural and organic products merchandising focus -- and a few others on the supermarket side, along with the new entries on the natural foods format side -- Sprouts and Sunflower -- promises to give Whole Foods Market more than enough competition in its home state of Texas.
Competitors throughout the U.S. markets Whole Foods Market is in are doing the same thing as we've detailed is happening in Colorado and Texas. This is the case in California, Florida, the eastern U.S. and on and on. National and regional supermarket chains and aggressive natural products retailers like Sprouts and Sunflower are providing more than enough competitive heat for Whole Foods.
In fact, contrary to the FTC's opinion, rather than Whole Foods Market, Inc. being in a category monopolistic position, the supernatural retailer is in the fight of its life.
And in the case of H-E-B, these combination mega-stores, which offer all the features of a supermarket, combined with the offerings of a natural and specialty foods store, are becoming a powerful force in Texas. Add in the in-store pharmacy, car wash, gas station and more, and they are one-stop shopping centers for consumers of all income levels and preferences -- from lovers of basic groceries to foodies.
That's a force to be dealt with by Whole Foods Market, Inc., particularly because these H-E-B stores have approached its natural foods emporiums in terms of product selection, design and overall offerings.
It's also another empirical example of why the FTC is wasting U.S. taxpayer resources by its continued focus on the fantasy that Whole Foods is a natural products category monopolistic retailer. Just ask the very busy natural, organic and specialty foods buyers over at H-E-B- if they feel the "Whole Foods natural-organic retail category monopoly" is hurting their category sales. The answer: Not in the least bit.
The combination of H-E-B, United Supermarkets (Market Street), Wal-Mart (Supercenters, Sam's Club, Neighborhood Market supermarkets), Costco, Safeway Stores (Randall's banner) with its Lifestyle format -- all retailers with a major natural and organic products merchandising focus -- and a few others on the supermarket side, along with the new entries on the natural foods format side -- Sprouts and Sunflower -- promises to give Whole Foods Market more than enough competition in its home state of Texas.
Competitors throughout the U.S. markets Whole Foods Market is in are doing the same thing as we've detailed is happening in Colorado and Texas. This is the case in California, Florida, the eastern U.S. and on and on. National and regional supermarket chains and aggressive natural products retailers like Sprouts and Sunflower are providing more than enough competitive heat for Whole Foods.
In fact, contrary to the FTC's opinion, rather than Whole Foods Market, Inc. being in a category monopolistic position, the supernatural retailer is in the fight of its life.
And in the case of H-E-B, these combination mega-stores, which offer all the features of a supermarket, combined with the offerings of a natural and specialty foods store, are becoming a powerful force in Texas. Add in the in-store pharmacy, car wash, gas station and more, and they are one-stop shopping centers for consumers of all income levels and preferences -- from lovers of basic groceries to foodies.
That's a force to be dealt with by Whole Foods Market, Inc., particularly because these H-E-B stores have approached its natural foods emporiums in terms of product selection, design and overall offerings.
It's also another empirical example of why the FTC is wasting U.S. taxpayer resources by its continued focus on the fantasy that Whole Foods is a natural products category monopolistic retailer. Just ask the very busy natural, organic and specialty foods buyers over at H-E-B- if they feel the "Whole Foods natural-organic retail category monopoly" is hurting their category sales. The answer: Not in the least bit.
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2 comments:
Part of the allure of natural foods supermarkets is their smaller, more manageable size. I shop at a smaller Wild Oats (now owned by Whole Foods), and love the fact that after the produce section, I only ever need to go down two of the aisles.
Even better, there aren't 40 different kinds of every product! So is it just me, or is the idea of a natural foods mega-market counter to what normally makes that experience more enjoyable?
Ryan Wanger:
Part of your argument is just in fact why we believe smaller format stores, including natural foods markets like Sunflower Farmers Market and Sprouts, are gaining popularity.
This is also being seen on the deep discount end of the spectrum -- Aldi and Sav-A-Lot for example in the USA; Aldi and Lidl in Europe and the like.
Also, things are getting smaller during this economic downturn. Newspapers are shrinking in content and size, smaller cars are being rushed into production, developers are building smaller homes, ect.
We think it is possible smaller-format food stores could be part of this trend. The jury remains out though. But that is one reason we write so much about small-format stores from natural foods markets to discounters and more.
Thanks for the great observation.
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