H.E. Butt Grocery Company (abbreviated H-E-B) is a privately held San Antonio, Texas-based supermarket chain with over 300 stores throughout Texas and Mexico.

History

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The company was founded in 1905 when Florence Butt opened C.C. Butt Staple and Fancy Groceries in Kerrville, Texas. In 1919, Howard E. Butt, her youngest son, took over the store upon his return from World War I. In 1924, he expanded the Butt Grocery Company with a new store in Junction, about 60 miles from Kerrville. Charles, the youngest son of Howard E. Butt, became president of the H.E. Butt Grocery Company in 1971. Today, Charles Butt is chairman and CEO of H-E-B, having grown the business from sales of $250 million in 1971 to $11 billion in 2003. In 2003, the company was #10 on Forbes' list of largest privately held companies; H-E-B is also the largest privately held company in Texas. Mr. Butt, whose fortune is estimated to be over $2 billion, is the richest man in San Antonio.

Historically, the company is known for its generosity, with 5 percent of annual pre-tax earnings given to civic and charitable organizations in the communities they operate in, including education and food banks. H-E-B is also very environmentally driven, focusing on recycling and conservation, and in 1999 began converting their Houston distribution fleet to run on liquified natural gas.

The year 2005 marked the company's 100th year in operation.

Operations

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High-end store formats

In 1994, H-E-B introduced its popular Central Market concept in Austin. Originally test-marketed in 1990 as H-E-B Marketplace in San Antonio, Central Market is an upscale store featuring hard-to-find gourmet foods and includes a European bakery, a deli with meats and cheeses from around the globe, juice and ice cream bars, humidors, and extensive wine and beer selections. The chain is now comprised of seven stores (two in Austin and one each in Dallas, Fort Worth, Houston, Plano and San Antonio). The H-E-B Marketplace, while still keeping its label, now offers only the standard H-E-B supermarket offerings.

Upscale H-E-B locations include the Woodlands Market, Kingwood Market (both in the Houston area), and Austin-Escarpment stores, which feature a selection of items found in Central Market and H-E-B stores.

Megastore format

In 2004, the company launched three (in Austin, San Juan and Waco) H-E-B Plus stores, 109,000-square-foot megastores with an expanded focus on non-food categories like entertainment, general merchandise, and a gift registry. In 2005, this concept was further expanded with three new locations (Corpus Christi, Round Rock and San Antonio) comprised of 161,000 sq. ft. each. As of July 2006, H-E-B has plans for four more such stores in the San Antonio area.^* A new 125,000-square-foot store is slated to open August 2, 2006, in Katy just outside of Houston. This will be the largest store in the Houston region and will be the first of the H-E-B Plus format in the region. Oddly, the store will simply be called H-E-B without the "Plus" included in the name.

Video stores

In 1987 H-E-B began H-E-B Video Central, a chain of video rental stores. After growing to 33 locations, H-E-B sold the chain to Hollywood Entertainment in 1993.

Manufacturing and private labels

The company operates several manufacturing facilities in Texas where it produces many of its own branded products including milk, bread, snacks, and ready-cooked meats and meals. These are sold under the name "Hill Country Fare." H-E-B also expanded to its grocery stores their Central Market-branded natural and organic items.

Markets

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Austin

H-E-B operated 38 Austin-area stores as of 2004 and held more than a 50 percent share of the grocery market.

Houston

H-E-B first entered the Houston market with its H-E-B Pantry Foods stores in 1992. The pantry stores were typically 30,000 square feet in size. Beginning in 2001, H-E-B either shuttered or expanded and converted most or all of its 45 H-E-B Pantry stores to full-service H-E-B grocery stores to better compete with Kroger Signature and Randalls Flagship stores. The full-service grocery stores were some 78,000 square feet in size, more than double the size of a pantry store.

San Antonio

As of early 2002, H-E-B's then 44-store San Antonio operation had reached a 61 market share and was the area's top grocer. Albertsons, then the area's second top grocer, exited the market in April 2002 by closing its 20 remaining area stores after already shuttering three other stores in December 2001. At the time of their withdrawal, Albertsons held a 15 market share. Albertsons was the area's third top grocer before Kroger exited the market in mid-1993, when it closed its 15 area stores. Then, H-E-B's 37 area stores held a 43.2 market share, Kroger's 15 area stores a 13.7 share, and Albertsons' 10 stores a 13.1 share.

Mexico

As of mid 2006, H-E-B has operations in four northern Mexican states: Coahuila, Nuevo León, San Luis Potosí, and Tamaulipas. They have 15 stores in the Monterrey metropolitan area, and it was in this city where they started operations in Mexico in 1997. H-E-B in Mexico competes fiercely with Soriana.

Louisiana

H-E-B opened its first store outside of Texas in 1996 — a 24,000-square-foot pantry store in Lake Charles, La. However, H-E-B closed their sole Louisiana store in 2003.

Terminology

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"Hebbing" refers to the act of going to H-E-B, although it can be used to imply shopping elsewhere. The term originated in Beaumont, Texas, and has since gained popularity in other cities, particularly in Austin.

"Heeb" is commonly used to refer to the store instead of pronouncing each letter of the acronym.

External links

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• H-E-B company web site
• Additional H-E-B history
• Forbes' List of World's Richest People: Charles Butt

Companies based in Texas | Privately_held_companies | San Antonio, Texas | Supermarkets of the United States | 1905 establishments

HEB