January 3, 2005

Texas Grocer Competes with WM

In its sprint to become the nation�s biggest grocer, Wal-Mart Stores Inc. has built hundreds of "supercenters" across the country and, along the way, forced others to dance to its tune.

But in Texas, a private family grocery chain is teaching Wal-Mart a thing or two about the food business.

Charles E. Butt and his HEB supermarkets have found a formula for not only surviving, but thriving in the same markets as Wal-Mart by playing off a simple creed: "We�re the local guy," Butt says.

From Texas-shaped tortilla chips to a special rubbing alcohol for keeping South Texans cool in the sizzling summers, HEB Grocery Co. has made catering to local tastes an obsession that has paid off with growing market share.

HEB�s 304 stores and $11 billion in annual sales are dwarfed by Wal-Mart, which has built more than 1,600 grocery-enhanced supercenters nationwide since 1988. But while HEB is relatively unknown among consumers outside of Texas, it�s providing a blueprint for competing successfully against Wal-Mart that�s being closely watched by the grocery industry. Even as Wal-Mart has spread throughout the state, with 213 supercenters, HEB has held on to market share above 60 percent in key cities, including Austin and San Antonio.

This was originally in the Wall Street Journal, but somebody did us the favor of making it free...

Posted by Kevin on January, 3 2005 at 09:29 AM