Charles C. Butt, the chairman and chief executive officer of H.E. Butt Grocery Co., San Antonio, likes to stir the pot.
The company for years has successfully practiced the art of traditional supermarket retailing with its H-E-B stores, operating primarily in Texas, but it has never been afraid to experiment with new formats and test new ideas.
“That’s a company that welcomes chaos, almost,” said one industry observer, who asked not to be identified. “[Charles Butt] does foster that.”
Previous format innovations have included the highly regarded Central Market banner, now an eight-unit chain catering to a higher-end consumer; H-E-B Plus stores, which offer a range of general merchandise; and Mi Tienda, a format geared toward Hispanic consumers.
In May of this year the company debuted yet another banner — a price-impact store called Joe V’s Smart Shop, offering what it calls “outrageously low prices” on “farm-fresh produce, top-quality meat and everything in between.”
The store, located in Houston, is about twice the size of another small-format store H-E-B has operated, called H-E-B Pantry, and carries about 9,000 items, including self-service meat, deli and bakery departments, according to a report in the Houston Chronicle.
The new store was said to be only a test, with no immediate plans for further rollout, but H-E-B has plenty of other expansion plans in the works for 2010.
In January the company, which started the year with about 317 locations — including 33 in Mexico — said it would build 13 new stores in the U.S. this year and six in Mexico. Another 60 locations were slated for expansion or remodeling.
In addition, the company was slated to open a new, 450,000-square-foot warehouse in Temple, Texas, that will serve about 50 H-E-B locations from Dallas to Austin.
The new distribution center, the company said, would help it reduce costs as it seeks to maintain its low-price reputation in the face of increasing competition from Wal-Mart, both in Texas and Mexico. Late last year the chain unveiled broad price cuts on 5,000 items its shoppers use most, including diapers, hair care, pet food, laundry detergent and paper towels.
In February the company also named a new president and chief operating officer — Craig Boyan, who had been chief strategic officer and COO. Boyan joined H-E-B in 2005 after working as a consultant for the chain as a partner with Monitor Group, New York.
The move to name a consultant from outside the company as president is also reflective of Charles Butt’s management style in terms of seeking fresh ideas to keep the business vital, observers said.
In an interview with the San Antonio Express-News, Butt said Boyan was a “good observer of situations and people.”
“I admired his strategic analysis of our business and his willingness to dig into the details,” Butt was quoted as saying. “I also liked him as a person.”
Boyan’s “strength of character, modesty and humility” were a good fit for H-E-B’s corporate culture, he said.