US Insights

H-E-B: How to Tackle the Titan of Texas

Diana Sheehan


Retail 06.07.2017 / 14:00


H-E-B is one of the top five grocery retailers in the U.S., with nearly $22 billion in sales .

Over the decades, H-E-B has grown into a Texas staple, one that is solidly positioned to capitalize on a strong and highly profitable Texas market using a clear and differentiated strategy.

Today, H-E-B is one of the top five grocery retailers in the U.S., with nearly $22 billion in annual sales expected in 2017 and growth projected to consistently outpace the market over the next five years.

To compete against one of the brightest stars in Texas — as well as the state’s single largest private employer — retailers need to understand the underlying strategies of H-E-B’s success. Manufacturers seeking to partner more effectively with H-E-B must understand these growth pillars in order to forge a strong dialogue with the retailer and execute strategies in store.

Key Numbers

  • $22 billion H-E-B annual sales in 2017

At the most basic level, H-E-B relies on three core principles to run its businesses:

Living local

Every decision H-E-B makes, including assortment, marketing, and innovation, starts with the local shopper. Inherently, that means starting with a Texas-first point of view, then going deeper into zip code and shopper demographics to make decisions. H-E-B illustrates best-in-class hyperlocalization that many of its largest competitors just can’t replicate. Whether it’s company-owned, Gulf-secured sustainable seafood, Texas beer, or local marinades differentiated by city, H-E-B capitalizes on its proud Texas shopper and builds its brand from there. 

Prominent private brands

Inherent in H-E-B’s offer is its sophisticated approach to private label products. The retailer has something to offer every shopper, from basics like H-E-B-branded sodas and baby products to sophisticated olive oils and vinegars. The retailer has even moved into licensed co-branded products in partnership with local celebrities. Witness its wildly successful Duncan O’s cereal that celebrated San Antonio Spurs’ legend Tim Duncan during his retirement year. H-E-B is incredibly innovative in this space, open to unique ideas (like Sangria soda) and branded manufacturers willing to work with it.

Merchandising excellence

At the heart of H-E-B’s success is the merchandising excellence that allows it to connect with shoppers in store. Its beautiful but targeted displays and promotional programs like “Combo Loco” and “Primo Picks” illustrate the value the retailer offers shoppers. Taking it one step further, H-E-B invests heavily in store communications that promote health and wellness and other concepts that are top of mind with shoppers. Unlike other retailers that focus on clean-store initiatives, H-E-B embraces support from manufacturers in this area and capitalizes on many shopper marketing initiatives to drive excitement in store and differentiate it from the competition.

Source: Kantar Retail

Editor's Notes

H-E-B is in a very strong position for future growth. To learn more about the retailer’s strategy and execution and how you can more effectively navigate the H-E-B landscape, join us for our inaugural H-E-B Strategic Planning webinar on June 29. This will be the most comprehensive evaluation of H-E-B’s business from Kantar Retail’s grocery team in 2017. 

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