Last updated on August 16th, 2012 at 12:08 pm[gn_note color=”#ff3333″] The 2012 West Texas originally ran in the February 2012 edition of The Shelby Report of the Southwest. Due to reader requests we will be posting our Profiles from each edition of The Shelby Report. The profile will be published on theshelbyreport.com one month after it has run in print.[/gn_note]by Terrie Ellerbee/associate editor
When Denny Porter was a baby, his parents would leave the front door and back door of their 1940s-era store open at night hoping to catch a cool draft on hot West Texas nights.
At least, that’s what Denny Porter was told happened. He was born into the business. He took over the family store in Andrews in the 1970s.
Today, his two sons, Judd and Trae, are the third generation now running the Porter family business that now is comprised of six Porter’s Thriftway stores in West Texas.
Denny Porter’s father, Ray, opened a store in the mid-1940s in Andrews. Back then it was one of five stores serving the town.
“Remember, back in the 40s, there weren’t many big stores,” Denny Porter told The Shelby Report’s Gordon Lowry, who visited with the father and two sons in December. “When I was born in 1945, I had a twin brother and we lived in the back of the grocery store. Lived back there for several years.”
Ray Porter would own stores on three different corners of the same block of Broadway in Andrews.
“He moved from this corner to this corner to this corner,” Denny Porter said. “That was his stretch.”
When Denny Porter graduated college in 1969, he knew he would come home to Andrews and work in the grocery business. He bought his father out in 1971 and in 1973 built a new store down the street from his father’s. Then around 1978, Porter added on to the store.
By this time, there were eight grocery stores in town.
Then Furr’s came, “and wiped them all out except us—and took half our volume in one week,” Denny Porter said. “But we were still here and we were the only ones here besides Furr’s in the end.”
West German-based Rewe-Liebbrand invested in Furr’s in 1979, following the death of the company’s founder, McKinney native Roy Furr. But by the early 1990s, Rewe-Liebbrand began to liquidate its Furr’s stores in the Texas Panhandle.
“And then they went busted. We were still here,” Denny Porter said. “We gained a lot of volume back, and the Good Lord blessed us and we hung in there and we got an opportunity to buy this building here (a former Furr’s located on Main Street). We bought it and took everything out, including the floor, put everything new back in it and we’ve been there nine years, and you can tell it’s still in good shape.”
Three years ago, the Porters bought three Baeza’s stores in the Big Bend area, and then about a year ago another acquisition brought the sixth store into the chain. Today, “the boys” run two stores in Alpine, one in Presidio, one in Ft. Davis and a store in Crane as well as the Andrews location.
Denny “Dad” Porter spends most days on the golf course (if the temperature is at least 50 degrees and the wind velocity is below 30 miles per hour; rain is negotiable). But by 4 o’clock, he’s at front of the store shaking hands and slapping customers who call him by name on the back.
That got him subpoenaed once—as a character witness.
“Dad may not know everybody’s name, but they sure know him,” Judd Porter said. “He got a subpoena to be a character witness in some criminal case on some guy, and Dad had to call his lawyer and say, ‘I don’t even know this fellow.’”
Affiliated Foods a partner from the start
Porter’s Thriftway stores are supplied by Affiliated Foods of Amarillo. They always have been.
“My dad bought from them when they were in Lubbock and then they merged with Amarillo,” Denny Porter said. “I’ve never had another supplier.”
Denny Porter also serves on the board, and has “for so many years, I can’t even remember.”
“We’ve got a solid board,” Denny Porter said. “We can go in there and we can disagree and come out friends, go back and do our work.”
Trae Porter praised Affiliated Foods for its role in the success of the family business.
“It depends on who your supplier is whether or not you’re going to be successful,” Trae Porter said. “We feel like without Affiliated Foods, we would be one of the eight or nine stores that’s no longer in Andrews. We really believe that strongly. I think that’s important.”
What matters most to them about Affiliated is that “they never lost sight of the fact that they’re in business to help us be successful—and I think a lot of the wholesale operations lost sight of that,” Judd Porter said. “They became a business all inside themselves and that hurts the grocery stores.”
Trae Porter said Affiliated Foods is “always there to help you.
“Anytime we’re opening a store, we’re doing a reset or whatever, they’re immediately there with knowledgeable people, with people that we’ve dealt with before, the relationships that you have with those people, therefore the trust,” Trae Porter said.
Denny Porter said Affiliated Foods’ bakery and dairy (Tri-State and High Plains Dairy) give independent grocers a real advantage.
“We have our own bakery (Tri-State Baking Co.), therefore we don’t cater to Mrs. Baird’s although we still have them,” he said. “We have our own milk company, Plains Dairy. We do not even handle Gandy’s in any of our locations. All we handle is warehouse milk.”
The Porter family’s stores are among the roughly 100 that Affiliated Foods supplies in West Texas.
Randy Arceneaux, president and CEO of Affiliated Foods, told The Shelby Report that he sees a record year ahead (see story, page 1). While some of the retailers served by Affiliated Foods reported flat sales for Christmas (though the Porters had a good one, Arceneaux said), the Thanksgiving holiday was very good.
In already competitive West Texas market, more competition is coming. Walmart has announced plans to open stores in the areas, with Walmart Express stores cropping up in El Paso.
“Walmart is not going to sleep,” Arceneaux said. “They are definitely coming into some of our markets where we have high concentration of volume.”
But the recent opening of a Walmart store in Fort Stockton near Porter’s Thriftway stores in Alpine, had no impact on their volume at all.
Arceneaux attributes that to learning how to compete against them and, as Judd Porter told The Shelby Report, the fact that Walmart isn’t the retailer it used to be.
“We went in after they opened and walked through and looked at it, and they’re not going to get any of our business,” Judd Porter said. “I just don’t think they do as good a job as everybody out there thinks they do. Our customers haven’t left us in Alpine. Now, granted, we’re an hour away …”
Denny Porter chimes in, “If they were next door, we wouldn’t be so tough talking.”
While the Porters don’t really have direct competitors in any of the towns they serve, they do see H-E-B as a formidable threat. It has stores in Midland and Odessa.
“Our benchmark would be H-E-B,” Trae Porter said. “They’re the ones we watch. They’re just incredible operators, they’re a great company, and that’s the one we’re more concerned with.
“We don’t base a lot of what we do or decisions that we make or reaction to the market on what Walmart’s doing,” Trae Porter said. “We do, however, watch H-E-B very closely.”
Organics, nonfoods popular new additions
In the rural communities that are home to their Thriftway stores, the Porters try to offer what the local community is looking to buy. If something works in one place, it may get a tryout in another. For example, in the Alpine store, organic and natural foods were popular.
“It really started when we bought the store in Alpine,” Judd Porter said. “That’s a really big market for that kind of product. We’ve since then put more of it in our other stores and have grown that area.”
Trae Porter pushed his dad and brother to offer more general merchandise and non-foods.
“Dad and I fought it for a year but he’s been proven to be right and it’s become a great category for us,” Judd Porter said.
Porter Thriftway stores also understand the Hispanic consumer, and the shifts in their shopping habits depending on how long their family has been in the U.S.
“It depends on if you’re dealing with first generation or second or third,” Judd Porter said. “By the third generation, overall, their habits are going to be the same as yours and mine.”
Hispanics are very loyal customers, typically have larger families than other ethnicities and tend to eat most of their meals at home.
“There will be many, many times all through the day that that’s all you’ll see in the store,” Denny Porter said. “We love ‘em. We love ‘em.”
West Texas economy thriving
Judd Porter joked that if it weren’t for Fox News, they wouldn’t know there was a recession. Things are that good in West Texas.
“The economy has been fantastic out here,” he said. “Andrews has grown. The community is a forward-looking community and has taken steps in years past to make sure that while oil still goes up and down—and definitely we’re tied to that—we’re trying to do some other things to hedge that some.”
The oil business does drive a lot of economic activity. Many oil field workers are Hispanic, and they send the money they earn home to their families in Mexico.
That is the case in Presidio, where the Porter’s have one store.
But, Trae Porter said, in other communities, like Alpine and Ft. Davis, ranching and tourism are driving local economies, keeping the economy in the Big Bend area steady, he said.
“You’re not going to have huge growth, but you’re also not going to have those painful years like we experienced in the oil patch,” Trae Porter said.
Randy Arceneaux agreed. “Times are good. The economy is really good in West Texas,” he said. “Our unemployment rate is a little over 5 percent, so you can see the economy is still very strong in West Texas.”
The national jobless rate was 8.5 percent for December.
Bloomberg named Amarillo one of the “10 Best Places to Start Over” citing its low unemployment rate and the potential for job growth.
If there is a drawback to the bustling economy in the region, it is finding employees.
“They’re making a lot of money in the oil field, and if they work in the oil field, most of them are,” Trae Porter said. “And if somebody in the household is, a lot of times ‘mama’ doesn’t need to work anymore. So that’s been a struggle for us.”
The key management team and younger sackers aren’t as hard to find as the more mid-range employees like department heads and stockers. But overall, keeping a full crew is not as big a concern for the grocery retailers as it could be for other employers.
“I’ve heard there are people who apparently are really in a bind,” Judd Porter said. “The thing we have going for us is the fact that our management team, our key people, are very strong. They’ve come up through the ranks with us. They know what we want. They know what we expect. They’re as good as any and they make our life very easy.”
Texas is the place for jobs
Where do you go when you already have an impressive record of job growth? Well, in Texas, the answer is up, though the Federal Reserve Bank of Dallas forecasts job growth will slow a bit.
Texas added 226,000 jobs in 2011, through November, a 2.2 percent increase over 2010. The Fed expects 1.5 percent to 2 percent job growth in 2012.
People have poured into the state seeking opportunities, and that population growth has kept the unemployment rate at 8 percent or higher since September 2009. In November, the jobless rate was 8.1 percent, a scant 0.20 percent drop from November 2010’s 8.3 percent rate. Texas gained 17,900 jobs in November after adding just 400 in October, according to The Fed’s reporting.
Mother Nature has played a role in the state’s economic health recently. The state is suffering from the worst one-year drought on record, which has been hard on crops and cattle. Losses were somewhat mitigated by higher commodities prices in 2011, but the drought and its financial impact—in Texas and beyond—are expected to continue.
The Austin American-Statesman reports that potential water and electricity shortages could hinder the state’s economic future, citing comments at a Texas Senate committee meeting in January.
Water is needed to cool generating plants, and the low retail prices for electricity are discouraging investment in future power plants, the American-Statesman reports.
Amarillo National Bank, in its annual economic forecast, quipped that the drought not only brought some “choppiness” to the local economy, but also depresses “everyone’s attitudes.”
In Amarillo, home to Affiliated Foods, the outlook is quite bright except for that “choppiness.” In 2011, retail sales rose sharply, the bank’s report states, and job growth in Amarillo was good, though “not great.” The oil boom in the eastern Panhandle continues, housing starts and prices remain steady, more apartments were occupied and rents have risen, the report states.
“Optimism for 2012 due to stronger employment and profitable businesses should boost Amarillo’s retail sales and housing market,” Amarillo National Bank’s forecast states. “Lack of any bubbles should give slow, steady increases in vehicle sales, travel, and real estate prices. Local job growth and our oil boom should offset declines from agri-business.”