LOOKING AT the San Antonio marketplace is like remembering the Alamo, which is located in the city's center — except that the hometown team, not the invaders, comes out victorious.
The hometown team is H.E. Butt Grocery Co., and it has managed over the years to force out chains who set up shop there, like Albertsons and Kroger, and to discourage others from entering its home market altogether.
“San Antonio is so dominated by H-E-B that hardly anyone really pays attention to it,” one industry source told SN.
“ H-E-B is very aggressive in defending its market position on its home turf. Its pricing is as competitive as can be, and it's willing to lower margins when anyone threatens its market-leading position.”
Wal-Mart Stores, however, is not just anyone.
Wal-Mart is the latest out-of-towner to move into San Antonio, and while it's still a long way from overtaking H-E-B, Wal-Mart may have more stick-to-itiveness than any of its predecessors had, and no one is counting it out yet as it continues to chip away at H-E-B's hegemony.
H-E-B operates 53 stores here, down from 55 in 2009. The sales loss from those two stores reduced its 2010 market share to 53%, compared with 53.4% a year ago.
Wal-Mart, with 20 supercenters — the same number as a year ago — is a distant No. 2. However, it picked up slightly more than H-E-B lost, with its 2010 market share rising to 23.9%, compared with 23.3% in 2009.
Despite its solid lead, however, H-E-B has seen the share gap with Wal-Mart narrow. In 2003, for example, H-E-B controlled 67% of the market, while Wal-Mart had just 14.2%
“H-E-B is a tough operator that has historically taken a ‘scorched earth' policy — it doesn't give up market share very easily,” a market observer told SN.
According to another observer, “H-E-B has always focused on building a low-cost delivery system that's on a par with Wal-Mart's, and it usually comes within 2% to 3% of meeting Wal-Mart price-for-price on the most visible items.”
Trailing the two leaders in San Antonio are Costco Wholesale Corp., whose three stores account for a market share of 6.4%, up from 6.2% a year ago; SuperTarget, with six stores that control 4.7%, up from 4.6% in 2009; and Sam's Club, with five locations and a market share of 4%, the same as last year.
The balance of San Antonio's market share is controlled mainly by a handful of small independents, “who do pretty well there,” one source told SN. “They cater primarily to Hispanic consumers in specific neighborhoods — mainly first-generation Hispanics who may not be comfortable shopping at a large-format store.”
The market also has three Sun Harvest locations, now owned by Smart & Final.