H-E-B SET UP FOR SPREADING SELF-SERVICE BAGEL PLAN

ROSEANNE HARPER

SAN ANTONIO -- H.E. Butt Grocery Co. here will roll out self-service, branded fresh bagel programs to 40 of its stores in the San Antonio, Austin and Corpus Christi, Texas, markets by mid-May.

That's according to officials at Manhattan Bagel Co., the branded bagel manufacturer that is working with H-E-B to expand on an earlier test market of the program.

The 230-unit supermarket chain began testing self-service branded Manhattan Bagel displays in 12 of its stores in San Antonio and Austin late last fall.

Officials at H-E-B's corporate offices did not return phone calls seeking comment on the rollout. A source at Manhattan Bagel told SN the current expansion will take the Manhattan Bagel program into H-E-B stores in the Corpus Christi market area for the first time.

"The rollout to additional stores indicates sales are up to expectations," said a spokesman for Manhattan Bagel, which is based in Eatontown, N.J. He declined to be more specific about the success of the linkup with H-E-B.

Under the agreement between H-E-B and Manhattan Bagel, a Manhattan Bagel franchisee -- Primeco Retail Group, Austin -- supplies the grocery stores daily with bagels it produces at regional commissaries.

The rollout to additional H-E-B stores will duplicate the test setup in the first 12 stores, said the Manhattan Bagel spokesman.

The displays use custom-designed, low-profile cases that prominently display the Manhattan Bagel logo, which is a stylized rendition of New York City's skyline. The 9-foot cases accommodate the company's 21 varieties of bagels, as well as 32 types of cream cheese spread under refrigeration.

This self-service format installed at H-E-B stores is a significant departure for Manhattan Bagel. Full, open production on the premises has been the company's hallmark before now, at operations inside supermarkets as well as in Manhattan Bagel's freestanding units.

Manhattan Bagel franchisees currently operate stores inside units of Cincinnati-based Kroger Co.; Vons Cos., Arcadia, Calif.; Genuardi's Family Markets, Norristown, Pa.; Clemens Markets, Kulpsville, Pa.; and in a Super Foodtown store in Manalapan, N.J. In addition to the above partnerships, test units are in operation inside stores operated by Albuquerque, N.M.-based Furr's Supermarkets in the El Paso, Texas, area and in a Smith's Food & Drug unit in Las Vegas.

In total, Manhattan Bagel currently franchises, licenses and operates 280 stores across the United States and Canada.