H-E-B Adds Joe V's Sites In Houston

MARK HAMSTRA

HOUSTON — H.E. Butt Grocery Co. is ramping up its Joe V's Smart Shop discount-store presence here ahead of an expected incursion by national discounters Trader Joe's and Aldi.

San Antonio-based H-E-B debuted the no-frills, price-impact Joe V's banner in 2010 with two locations in the northern and eastern areas of Houston. It is scheduled to open a third store later this month in the northwestern area of the city, and last week H-E-B said it has broken ground on a fourth Houston location.

The moves follow the establishment of a Texas beachhead in the Dallas-Fort Worth market last year by Batavia, Ill.-based limited-assortment grocer Aldi, including a warehouse to support expansion.

Trader Joe's, the Monrovia, Calif.-based specialty chain also known for its small box and discount prices — and which shares ownership with Aldi — also is reportedly seeking to expand into Texas.

“We're excited about bringing Trader Joe's to the wonderful cities, towns and neighborhoods in and around Dallas/Fort Worth, Houston and beyond,” Alison Mochizuki, a Trader Joe's spokeswoman, told the Houston Chronicle.

Trader Joe's filed a lawsuit last year seeking to prevent H-E-B from using the Joe V's name, although H-E-B has continued to use it.

Officials at H-E-B could not be reached last week.

H-E-B has expanded aggressively in Houston in the last several years and is the No. 3 operator behind Kroger Co. and Wal-Mart Stores, according to the most recent data from Metro Market Studies, Tucson. Between its traditional supermarkets, three H-E-B Plus stores, one Central Market and one Mi Tienda location, H-E-B captured 19% of the market share last year, up from 17.8% in 2009. Kroger and Wal-Mart each had 21.2% last year, both down slightly from 2009.

At about 50,000 square feet, the Joe V's format is larger than either Aldi or Trader Joe's but features a similarly strong focus on private label (featuring H-E-B's Hill Country Fare) and low prices, but also features a larger perishables offering, including full meat and seafood departments and bakeries, according to reports.

The format has developed a customer fan base not unlike Trader Joe's, with Houstonites posting requests for Joe V's to open in their neighborhoods on the banner's Facebook page.

H-E-B also is continuing to expand its traditional stores in the Houston market, with a 104,000-square-foot location slated to open Aug. 31 at The Woodlands.