SAN ANTONIO -- H.E. Butt Grocery Co. here opened its second large H-E-B Plus store here late last month, a 170,000-square-foot unit that is heavy in most nonfood categories except clothing.
General merchandise categories in the H-E-B Plus store that opened on Oct. 28 include entertainment products like CDs and DVDs, a large Baby Land department, furniture, and a section of dollar products, according to store employees. The store also includes a pharmacy with a drive-through window, and health and beauty care products.
This new format is "tailored towards our customers after several years of consumer research," and is the next generation of H-E-B stores, said Kate Rogers, spokeswoman for the retailer. While H-E-B executives provided few details about the store, the San Antonio Express-News reported that it has a drive-through pharmacy window, and leased space areas for a cell phone service, a jewelry store, a medical clinic, and H-E-B Insurance, a new business venture for the retailer.
Rogers told SN that the "superstore" format is going to continue with the opening of a similar H-E-B Plus on Nov. 11 in Round Rock, Texas, near Austin. "While all of the Plus stores are designed with the same concept, we do tailor each store to its specific neighborhood," Rogers said.
"H-E-B has been following this superstore path for about two years, continually increasing its general merchandise," said Neil Stern retail consultant, McMillan/ Doolittle, Chicago.
As a traditional food chain, the company has the ability to successfully expand into a very effective "hybrid supercenter," said Stern. Kroger Co., Cincinnati, also has been opening large stores similar to this under its Marketplace banner.
The new stores are a natural progression for H-E-B. "We have added new categories and new services that our customers have told us they would like to find for added convenience," Rogers said.
One new service is home and auto insurance under H-E-B, Rogers said, likening it to the drive-though pharmacy window as "something our customers have shown interest in."
The Plus format is a smart strategic move for H-E-B, according to Burt Flickinger, managing director of Strategic Resource Group, New York.
"Consumers have as much confidence in H-E-B's nonfood quality as they do its food. So more nonfood improves H-E-B's gross margin mix against other stores and gives them an opportunity for more unplanned and impulsive buys, which can be triple or quadruple what food grosses," Flickinger said.
It seems H-E-B is continually looking to make its stores able to "win the war against Wal-Mart," Flickin-ger said.
Merchandising at H-E-B Plus stores will be much like that at the regular supermarkets, Rogers said, with everyday low prices, specials and "surprise buys" as part of the strategy.
This is the retailer's fifth H-E-B Plus store, although three are about 100,000 square feet. One that opened recently in Corpus Christi, Texas, is 190,000 square feet, according to the San Antonio Express-News.