H-E-B's newest store: Continual innovation pays off

Many years ago, I had the opportunity to interview Scott McClelland, president of H-E-B’s Houston division, on the future of retail. The interview was inspiring and insightful, and one of his comments still resonates with me many years later. He said that H-E-B fosters a culture of “restless dissatisfaction,” driven by Charles Butt down through the organization. Rather than celebrating a new store, they instead ask themselves, “What could we have done better?” and, “What changes will we make moving forward?”

As a consultant who’s been around the retail industry a long time, this cultural trait is not a bad way to divide the winners and losers. The best companies we’ve worked with epitomize this spirit of restless dissatisfaction and are open to criticism and a desire to want to get better. When we walk into a company that is defensive, content to rest on their laurels or satisfied with being pretty good, they can be flagged right away for poor long term prospects (and undoubtedly a rocky consulting gig!).

H-E-B is one of the more consistently inspiring retailers in the world. They are never content and constantly innovating, whether it be with a format (Central Market, Mi Tienda, Joe V’s) or with experimentation within their footprint.

I had a chance to visit their latest 91,000-square-foot store in Houston, which is a replacement of a store just a few blocks away. There are many great features in this format and many new ideas that weren’t present in my last visit to their stores, which was just a year ago:

• They’ve doubled down on local. Big, bold signage and programs to underscore their Texas ties. In Texas fashion, they’ve gone big here, to great effect.

• Private label innovation is outstanding. They truly take a category driven approach to be as competitive as possible in section by section of the store. This is the harder way to build a program but more sustainable in the long run.

• The Cooking Connection kiosk anchors activity in perishables (meat, seafood and produce) and creates a focal point or recipe driven cooking.

• There are splashes of innovation everywhere, from a grind your own spices section within grocery to a specialty jerky display.

• Perhaps the biggest news is the inclusion of Table 57, a fast casual “farm to table” restaurant with a menu inspired by a well-known Houston chef. It ups the ante in in-store dining and has a nice indoor/outdoor eating space complete with a stage for musical performances.

The store is great example of the power of continual innovation. The best retailers are never content to settle for status quo. H-E-B exemplifies the spirit of striving for the best.

What examples of in-store innovation are you seeing in the market?