HEB Focuses on Growth: San Antonio Retailer Expands New Home Decor Department Across the Area – San Antonio Express-News | Candle Made Easy

In the spacious HEB plus! Store at US 281 and Evans Road, customers browse colorful cushions, rugs, vases, frames, chairs, ottomans, doormats and bundles of dried lavender.

Mirrors and wall hangings are displayed alongside table linens, lamps and plant holders under a sign that reads “Welcome to your happy place”.

The new division, dubbed by HEB Home, is one of the San Antonio-based grocer’s latest moves to expand its business. While adding store locations — which it does as it moves into the Dallas-Fort Worth area — is an important route to growth, growth in mature markets like San Antonio may require something new.

“By bringing higher-margin categories like Home into the mix, HEB can grow its profits without straying too far from its geographic footprint,” said Carol Spieckerman, president of retail consulting firm Spieckerman Retail, based in Bentonville, Arkansas. “Retailers like Walmart and Target use food as a lure that drives traffic, leading to sales in more profitable categories. Grocery retailers like HEB can reverse this game by layering on non-grocery categories.”

The strategy is not new. Supermarket chains like Iowa-based Hy-Vee, Ohio-based Kroger and others have been experimenting with new formats adding homeware, clothing and even fitness equipment. They know that expanding into such non-food categories is a means of increasing traffic, sales, and profits.

HEB is pushing into the housewares segment this year. After introducing the Home by HEB concept in April at its Walnut Avenue store in New Braunfels, the company has since expanded it to four additional stores in San Antonio, Brownsville, Burleson and Corpus Christi.

It plans to add it to about 27 stores across the state this year, including new stores in Frisco and Plano.

Two years of planning

Home by HEB has been in the works for nearly two years, said Sabina Israelin-Garcia, the company’s group vice president of general merchandise, drug store and beauty.

“We’re always looking at new categories and always making sure we’re presenting the best to our consumers,” she said.

At its San Antonio store, the approximately 2,500 square foot section within the 130,000 square foot store includes more than 500 items and is among the largest Home by HEB departments.

It includes two brands: Haven + Key and Texas Proud. The former includes furniture, accent pieces, and home furnishings, and the latter showcases items made by Texas-based artisans and companies, such as leather goods from Lucio Tailoring Co. in San Antonio.

The company is known for adapting its stores to the environment, and the home division will be no different, Israelin-Garcia said.

Beyond local connections, HEB has long benefited from the source of Texas pride, and its foray into home decor reflects this — wall art is adorned with the state flag, Longhorn throw pillows are inscribed “Howdy,” and a display reads “God bless Texas.” -Signs.

“From a product and brand perspective, we will continue to innovate and evolve over time, so customers can count on continued product freshness over time,” said Israelin-Garcia.

Why it makes sense

In the San Antonio area, where the company last opened a new store in 2020, HE-B’s expansion into non-food categories is necessary to boost sales and profits, retail experts said. It and other grocers face increased competition in an industry with razor-thin margins and need to move beyond traditional groceries to thrive.

“Margins in non-food, including household goods, are much better and can bolster HE-B’s profits,” said Neil Saunders, managing director of the retail division of London-based data analysis and consulting firm GlobalData.

“When supply is good, adding home products can help increase sales because shoppers explore as they shop and are likely to make spontaneous purchases,” Saunders said.

With gas prices soaring, it’s also important for customers to do more of their shopping at a single store — “that provides another reason for expanding the category,” said Spieckerman, the Arkansas-based consultant.

Another factor in the diversification is that HEB has large stores that provide space to test different concepts, said Venky Shankar, research director at Texas A&M University’s Center for Retailing Studies.

“They have the space, and if people want to look around post-pandemic, why not try a few concepts?” he said.

While HEB has built a loyal following in part by emphasizing its ties to Texas through its product ranges, competitors like Walmart and Target aren’t nearly as adept at this, said Jon Hauptman, senior director of e-commerce at Inmar Intelligence, a retail analytics firm in Winston – Salem, NC

“They’ve built their entire business around addressing local tastes and local needs,” Hauptman said.

But new product lines bring new challenges. Managing housewares and decorating involves a different business model than managing groceries, Hauptman added.

The speed at which an item is placed on a shelf and purchased is much faster for non-food items, and higher gross margins are required to offset higher costs of importing and handling those items, he said.

“By putting the right people in place and allocating the resources and space in the store, it’s possible to do it very well,” Hauptman said. “But it is not easy.”

Other HE-B efforts

HEB has experimented with other departments in its stores.

Along with Home by HEB, the store at US 281 and Evans includes nearly 4,000 square feet dedicated to beauty items.

The company added the division in 2019. It includes cosmetics, hair products and skincare, as well as testing stations and an interactive screen where customers can pose for photos.

The store also has HE-B’s first two-story True Texas BBQ restaurant, providing another stream of customers who can come for a bite and stay to pick up groceries.

It also has small shops in some of its stores: Mia’s Mirror, Bonita Brows Bar, Diamond Decks, and River City Flooring.

And the company is pursuing other avenues to increase its bottom line.

HEB is opening more health clinics offering primary care, nutrition and pharmacy services, and physical therapy.

In May, it added its first clinic in Austin after opening locations in San Antonio and Houston, and said it “plans to expand rapidly across Texas with both primary care and nutritional services over the next few years.”

The clinic openings reflect “retailers’ push into solutions and services, particularly in the health and wellness space,” Spieckerman said.

Also in Austin, HE-B’s Central Market opened a so-called “meatless butcher” in April, the company’s answer to rising demand for plant-based foods. If it works there, it could be rolled out to HE-B’s other stores.

The company is also investing in curbside and delivery services by building more facilities and reserving more square footage in its stores for stocking and preparing orders.

“Convenience is another key area of ​​expansion for retailers,” and curbside and delivery services “add to HE-B’s convenience arsenal,” Spieckerman said.

Such moves are important as competition for online shoppers continues to increase. In recent days, for example, Kroger has returned to San Antonio with a delivery-only service.

HEB opened an e-commerce fulfillment center in Leander in mid-July, the fifth it has built since 2018. The company plans to add more such facilities throughout Texas, including in Plano, as it enters the Dallas-Fort Worth market with its first namesake stores.

It has operated its upscale Central Market stores in north Texas since 2001, but no HEB stores. The eponymous stores in Frisco and Plano are slated to open later this year, and two additional stores under construction in McKinney and Allen are slated for completion next summer.

HEB continues to expand in its existing markets, including the San Antonio area. New stores are in the works in Cibolo and near Fair Oaks Ranch.

madison.iszler@express-news.net

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