There's little debate about whether H-E-B is a best-of-class operator. But opinions vary on what makes H-E-B so good. Here are some comments from key academics, consultants and financial analysts:
price. They are non-union, they have very strong market share and they kind of own the EDLP image in Texas even though Wal-Mart is there. In fact, even Wal-Mart has acknowledged that H-E-B is one of the most efficient distributors around. H-E-B also has the Central Market format, which is the gourmet, high-end format that enables them to pull in some new ideas and move them into their standard format, which gives their stores a more upscale feel."
Richard George
professor of food marketing, Haub School of Business, St. Joseph's University, Philadelphia:
"For H-E-B, the whole vision of focusing on the customer washes over the entire organization. They focus on the front door, unlike much of the industry, which focuses on the back door. H-E-B realizes that customers only buy good feelings and solutions to problems. Food is a great opportunity to make people feel special about shopping. H-E-B lets shoppers take care of their family's food needs and makes it fun."
Neil Stern
senior partner, McMillan Doolittle, Chicago:
"H-E-B has the attitude that 'this is our market and we won't let anyone take anything from us.' They have a 'don't-mess-with-Texas' philosophy, and view any incursion as a serious threat. They also want to play in all channels for customers, including mainstream H-E-B stores, Central Market for upscale customers and Hispanic stores. They have the right format for the right customers."
Meredith Adler
managing director, Lehman Bros., New York (from SN analyst roundtable):
"You could argue that H-E-B is successful because it operates in such an interesting market, where there are a lot of low-income Hispanic consumers who are very interested in high-quality food and perishables, which is an unusual combination for the rest of the country, which means they have to be able to do fresh well while at the same time be able to concentrate on low prices. What a learning experience for a company!"
DON STUART
partner, Cannondale Associates:
"In Cannondale's Power Ranking this year, H-E-B was ranked by manufacturers as No. 1 in clearest company strategy, best job of branding stores, best buying team and best supply chain. H-E-B is clearly a leader in the grocery industry."
