Merchandising Features / Trend Features

A Texas Two-Step

July 5, 2012
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KEY POINTS


H-E-B is aggressively competing on price and freshness.


In-store coupons and cross-merchandising are prominent in outlets.


Perishables areas feature a variety of private-label brands.

 

Though its roots go back 107 years, the H.E. Butt Grocery Co. is exceedingly vibrant.

The San Antonio-based operator of the H-E-B and Central Market supermarket chains is keeping pace with evolving shopper behavior to remain a formidable competitor to such foes as Wal-Mart Stores Inc. and Whole Foods Market Inc.

There are 329 mainstream H-E-B outlets in Texas and Mexico and nine Central Market locations in Texas.

Central Market carries large amounts of fresh, prepared and artisan perishables, including more than 700 hand-cut cheeses and hundreds of meat and seafood offerings in what the company calls its “European-style fresh market.”

H-E-B, meanwhile, is leveraging price and freshness to standout in a crowded sector.

“H-E-B concentrates with a huge intensity on Walmart since Walmart has a price focus and H-E-B does not want to give them an inch,” says Bill Bishop, chief architect of Brick Meets Click, a Barrington, Ill.-based information advisory firm. “H-E-B is concentrating on market share and a lot of their activity is designed to gain and defend that share. That pretty well means they have to give strong price offers.”

And those offers include the generous distribution of coupons throughout the store.

An H-E-B outlet in Waxahachie, Texas, about 25 miles south of Dallas, recently had dozens of coupons attached to shelves featuring buy one, get one free offers, and promotions where shoppers could get 50 cents to $2 off a product’s shelf price.

Deals included $2-off H-E-B fully cooked frozen breakfast sandwiches; $1-off So Delicious coconut milk; and 50 cents-off Land O’ Lakes fresh butter taste spread.

Many of the coupons also involve cross-merchandising.

Among the offers were buy a family pack of 16.1-ounce H-E-B lunchmeat and get a 12-ounce

H-E-B American Singles cheese for free; buy one-half pound of H-E-B Fried or Cajun Fried turkey breast, or Central Market Oven Roasted turkey and get one-quarter pound of Jalapeño or Pesto Jack cheese for free.

In addition, shoppers that bought Michael Angelos frozen meals received an H-E-B Gourmet pound cake for free; and those that purchased Stouffer’s family size meals received a free Sara Lee cheesecake.

“H-E-B has found that coupons are a very effective tool for communicating,” Bishop states. “It allows them to offer a low price [and create the perception of being a lower-price merchandiser] without having to lower the shelf price.”

The retailer also leverages a variety of private-label brands, which are intended to represent value and quality.

Hill Country Fare and Hill Country Essentials are targeted at budget-minded shoppers, with the brands up to 40-percent less expensive compared to national brands, the company reports.

H-E-B-branded products are “high-quality” and “specifically created for Texas tastes.” 

Items include frozen chicken breast, frozen popcorn chicken, packaged cheese, smoked sausage, bacon, refrigerated side dishes—such as mashed potatoes, macaroni and cheese, and mustard potato salad—and fajitas.

H-E-B-branded products are “high-quality” and “specifically created for Texas tastes,” the retailer notes.

Among the products are refrigerated chicken, frozen tacos, frozen cheese sticks, frozen tilapia fillets, milk, frozen fruit, frozen breakfast tacos, rotisserie chicken, fully cooked brisket and seasoned fajitas.

The Central Market brand is for foods with “the freshest and most pure ingredients,” and includes organic butter, frozen vegetables, soymilk, frozen mini waffles, organic cage-free brown eggs, organic omega 3 eggs, frozen pizza and frozen fruit.

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