Charles C. Butt is never satisified. There's always more that can be done, he said.
That fact stands out clearly in this down economy, as demographics shift, customer bases become more segmented and consumers alter their shopping patterns.
“We did a lot of format refining, which we think is important because of the increasingly bifurcated aspects of the American economy,” Butt, the chairman and chief executive officer of H.E. Butt Grocery Co., told SN.
“Income groups and lifestyle groups have become more distinctive in their taste differences. That requires continued tailoring of our upmarket stores, which includes using a lot of ideas from our Central Market format.”
In addition to taking ideas from one format to another, tweaking product assortment in its value stores has become a priority for H-E-B.
“Those customers are under enormous pressure when it comes to two key items in their budgets — food and fuel — so we’re attempting to attune ourselves as closely as we can to his or her needs.”
One of his aims, Butt said, is to think in terms of serving a family of four with food that’s tasty, diversified and affordable.
“We’ve refined assortments. We’ve given more space to items particularly important to value customers. In doing so, we’ve eliminated some items that we think inappropriate so we can make more space for what’s important to the value customer.”
Much of the format tailoring has been directed at H-E-B’s Plus stores. Assortments have been cut back, and the size of the stores will be dropped back as more are built.
“Our first was 190,000 square feet, but we’ve dropped back to 120,000 to 140,000, and that’s what we’ll stay with as we go forward,” Butt said.
“We’re looking, too, at a new small format [stores], just like everybody else is,” Butt said.
Referring to soaring fuel prices, Butt said it’s more important than ever before to have a network of sizes and formats within one market.
“We’re learning that. We think trip time will be reduced if fuel stays the same or goes higher. People will be less inclined to drive long distances.”
The San Antonio-based company, under the direction of Butt, is regarded throughout the industry as a thought leader, said Ted Taft, managing director at Meridian Consulting, Wilton, Conn.
That could be because Butt never stops looking and learning. His company is more focused than ever on studying customers and their purchases to better meet their needs, he told SN.
“We’re drilling deeper into data. I’d say we’ve doubled that effort in the last year.”
Even as studying, refining and redoing intensifies, Butt has led the company to record sales that’ll hit $15 billion at the close of the company’s fiscal year. That’s up from $13.5 billion last year.
— ROSEANNE HARPER