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2012 South Texas Profile: H-E-B Gets Bigger and Better in San Antonio

H-E-B San Antonio

Last updated on August 16th, 2012 at 12:08 pm

[gn_note color=”#ff3333″] The 2012 South Texas Profile originally ran in the June 2012 edition of The Shelby Report of the Southwest. The profile will be published on theshelbyreport.com one month after it has run in print.[/gn_note]

by Terrie Ellerbee/associate editor

To say that South Texas has been doing well in the wake of the recession would be understating the case. Its economic base is diverse, with industries ranging from energy production and automobile manufacturing to bioscience and cyber security. Tourism and a large military community also contribute to its strength.

The Eagle Ford Shale, located just south of San Antonio, contributed $25 billion in economic output in the region last year alone, according to a study by the University of Texas at San Antonio Center for Community and Business Research. Energy industry companies like Baker Hughes, Halliburton and Schlumberger are eyeing the area for development.

The San Antonio Business Journal reported on the study, which also projects that work in the shale will create 117,000 full-time jobs this year paying $3.1 billion in salaries and benefits.

Those jobs are a boon to San Antonio, which is one of just four cities (all were in Texas) to regain all the jobs it lost during the recession, according to The Brookings Institute.

Health care and the biomedical industry employ nearly 150,000 people, who work in ­diabetes treatment and research, regenerative medicine, neuroscience, cancer therapy and ­research and infectious diseases.

There are about 70,000 people working in the construction, medical and cyber security ­industries to support the large military presence created by the 2005 Base Realignment and Closure (BRAC) Commission decision to consolidate Army and Air Force operations on campuses across the city. More than $3.4 billion in related base construction has given the local economy a boost.

There also is The University of Texas Health Science Center; Texas A&M University-San Antonio, Trinity University and a large community college system serving 100,000 students in Bexar County alone.

The number of retail-based medical clinics is growing, too. MinuteClinic launched its first retail clinics in Texas in 2006 and now has 45 in the state. It recently opened two clinics inside CVS stores in San Antonio.

The ManpowerGroup has named San Antonio the country’s best city for job seekers and Forbes ranked it eighth among best places for business and careers and fourth among boom towns in the U.S., the Journal reports.

The Milken Institute, a nonpartisan economic think tank, ranked San Antonio No. 1 on its annual list of Best Performing Cities, based on jobs, wages and technology performance.

Still, there are challenges. Scott McClellan, president of H-E-B Houston and the Central Market Division, said he is worried about the divide between the haves and the have-nots. The University of Houston’s newspaper, The Daily Cougar, reported on a presentation McClelland brought to the school’s Retailing and Consumer Sciences department.

“While the total economy is larger, the reality is it’s only larger for some people and that tends to be for people who have money,” McClelland said. “As a result, over time we are seeing a shrinking middle class.”

He also said that serving a diverse customer base, particularly the large Latino and growing Asian populations, is a challenge. He has traveled to Mexico and Central America looking for new ideas and products.

“You start to look at what the average American looks like and there isn’t an average American,” McClelland said. “When you try to merchandise toward average, you’re not going to be gaining anything.”

Texas is still the second most-populous state in the country, and this year on April 3, it reached a milestone: 26,030,000 residents.

San Antonio had the largest increase in population among the 10 largest cities in the U.S. between 2000 and 2010, according to the U.S. Census Bureau. It grew 16 percent, adding182,761 residents. It ranks seventh in total population, putting it between sister cities Houston (No. 4) and Dallas (No 9).

San Antonio has a stable housing market, too. In 2011, there was the same number of home sales as there had been in 2010, approximately 17,900. The average price of a home—$185,516—also remained unchanged between 2010 and 2011.

H-E-B gets bigger in home city

No grocery retailer is more active in San Antonio than H-E-B, which calls the Alamo City home.

H-E-B has been growing bigger and better in the San Antonio area, recently opening three new stores that are much larger than the ones they replaced.

The first is the granddaddy of all H-E-B stores: the largest H-E-B Plus store to date opened April 27 in San Antonio. It is the company’s 10th H-E-B Plus store. The 182,000-s.f. store is ­located at Bandera Road and Loop 1604 in San Antonio’s busiest market for new-home building, reports the San Antonio Express-News.

It is twice the size of the store it replaced. It was built on 44 acres and has more than 1,180 parking spaces.

The new H-E-B Plus has expanded meat, produce, seafood and bakery departments. Customers can get fresh guacamole made in the store while they wait, and pick up fresh tortillas at the tortilleria.

There is a pharmacy, an electronics department, and a “Texas Back Yard” garden and outdoor grilling department as well as baby and toddler, healthy living, card and party areas. There also is a “Pet Destination” area that is much larger than the aisle and a half of pet products previously available in the older store.

Along with a full offering of ­groceries, shoppers will find sheet sets, comforters, hampers, storage items, small kitchen appliances, tools, plants, digital cameras, iPod accessories and more in the large store.

There are environmentally friendly skylights, LED lighting on motion sensors in food cases that turn them off when no one is in the aisle, a system that collects waste heat from refrigerated cases and freezers that is used to heat water as well as night shades for the ­refrigerated cases.

The store needed 150 more people to run it, bringing the total workforce at the location to about 560 employees.

Last Oct. 28, a new H-E-B Plus store opened in nearby Lytle, replacing a 34,000-s.f. location with a new 116,000-s.f. location. It has 21 check stands, a two-lane drive-thru pharmacy and a four-window business center.

An H-E-B opened on Sarah DeWitt Drive in Gonzalez on March 16. The 53,000-s.f. store is nearly three times the size of the 19,000-s.f. store it replaced, and carries 10,000 more items. It also has more checkout lanes.

It features a deli with ready-to-eat choices like rotisserie chicken, an expanded organic ­selection in the produce department and scratch rolls and other goods from the bakery, as well as an expanded general merchandise area. It also has a separate fuel stop area and a pharmacy with a drive-thru lane.

Last summer, H-E-B­ acquired three Albertsons stores, one each in Kerrville, College Station and New Braunfels.

The former Albertsons in Kerrville opened as an H-E-B on Nov. 18, 2011, at 313 Sidney Baker. It is the second location in that city, and the company planned to invest $2 million to renovate the 49,000-s.f. site. That is significantly smaller than typical H-E-B supermarkets, which average 118,000 s.f.

H-E-B planned to lease the other two Albertsons locations it purchased.

Inside some of its stores, H-E-B launched “Primo Picks,” described as “unique, tasty and cool products you may have never heard of or tried before … that H-E-B searched the world for and brought home just for our customers.” They made their debut on April 25 at some Houston area stores. Flyers promoting the Primo Picks have been seen in the San Antonio market as well.

Among the more than 80 Primo Picks are H-E-B Mootopia lactose-free milk; H-E-B Prime 1 Beef, aged for 14 days; H-E-B Chef Prepared Chicken Salad with new flavors including Cilantro Chili Lime and Agave Mustard; H-E-B That Green Sauce, a salsita featuring jalapeno and poblano peppers. There also is a new line of Cul-De-Sac wines priced at $2.98 a bottle and developed with a California winemaker.

With more than $18 billion in sales, H-E-B has more than 335 stores in Texas and Mexico. The company celebrated its 105th anniversary in 2010. H-E-B employs more than 76,000 partners serving millions of customers in more than 150 communities.

No other grocery retailer has experienced the growth over the past year that H-E-B has in the San Antonio area, although one popular format announced its first Alamo City site.

Last August Trader Joe’s announced that it would open a location in San Antonio, but it did not say where exactly. In March of this year, the California-based grocer said it would open the first San Antonio Trader Joe’s store at Quarry Village in an 11,000-s.f. space formerly ­occupied by the national furniture retailer west elm, according to the San Antonio Express-News. It will be the fifth site in Texas for Trader Joe’s, joining others in Dallas, Fort Worth, Plano and The Woodlands. The newspaper reports that the spot is near an H-E-B and a Whole Foods Market store.

Whole Foods Market has been in the city since 1993. The Austin-based organic and natural grocery company announced last year that it would open a second San Antonio location, a 35,000-s.f. store in The Vineyard shopping center. It is expected to open this fall.

Walmart has announced it will build a new 150,000-s.f. supercenter store on San Antonio’s west side. It will be the 15th in the area and is expected to open in 2013.

Featured Photos

Featured Photo Grocer’s Supply Show, July 31- August 1
NRC Center
Houston, Texas
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