pseudo3d wrote: ↑January 12th, 2023, 7:40 am
The most biggest chink in the armor is the public expecting that every H-E-B opened will be this 100k+ square foot palace with an in-store eatery, which couldn't be farther from the truth. I believe they bought the former Albertsons in Redbird or the plot of land next to it--and not only will that store probably not be upscale, but will be up against stiff competition with a WinCo.
My guess is they won't put a full-fledged HEB in the Redbird location.
One of the news articles about HEB's expansion into the area quoted a company official saying that they anticipate serving the D/FW market with all of their formats.
HEB does have a couple of formats beyond Central Market which has been serving the D/FW market for many years now.
One that I suspect would be a good fit for the Redbird location is Joe V's Smart Shop
https://www.joevsmartshop.com/
Apparently, the format is doing well enough for them to have opened 9 locations in the Houston area. If you go to their website and browse their pricing for curbside pickup, you will see that they are very competitive on pricing. Many of their items are the same in-store brands found in conventional HEB stores such as HEB and Hill Country Fare. I suspect that they could snatch a lot of business from Aldi and from any Winco location that might be reasonably nearby. And, unlike Aldi, Joe V's carries national brand items in addition to in-house brands.
They also operate a Mexican-focused format called Mi Tienda.
https://mitiendatx.com/
This would certainly go after customers who currently shop at Fiesta Mart and other Hispanic grocers. But, since Mi Tienda only has two locations, both in the Houston area, my guess is they are still experimenting and tweaking the concept and thus would be unlikely to expand to the D/FW area any time soon.
My gut feeling is that bringing Joe V's to the D/FW area would be a great move for HEB. It would enable them to very effectively serve the entire spectrum of the market with Central Market serving the very high end, Joe V's serving those who are extremely price conscious and conventional HEB stores serving everybody in between with individual stores tailored to their area's specific demographics. And they would have great economies of scale in doing so using the same distribution center and truck fleet as well as their existing private label procurement. Joe V's sells items, including private labels, that HEB already carries in their conventional HEB stores. And the HEB stores that are located in higher-income areas carry many of the private label products that were created for Central Market.
Going back to the main topic, Tom Thumb in Waxahachie will be an interesting acid test to help see if this "H-E-B is unstoppable" myth is really true or not.
Well, a Tom Thumb store is, for all intents and purposes, a Randalls store with different letters used in a similar logo. Randall's bought out Tom Thumb and standardized a few things. When Safeway bought out Randall's, any remaining difference between the two chains was largely eliminated.
I seriously doubt that a Tom Thumb, by some inexplicable miracle, would be more successful against HEB than Randalls has been successful against HEB. And Randalls has hardly been successful against HEB - if it is even logically permissible anymore to utter the words "successful" and "Randalls" in the same sentence.
In Houston they are down to a handful of stores after once upon a time having been the market leader. In Austin, Randalls does seem to have held up better than in Houston. But it is hardly what I would regard as particularly successful. I suspect the reason it has managed to survive better there is that, in Austin, Randalls does not face additional competition from Kroger as it does in a big way in Houston.
Anytime I have been in an HEB, I have always seen people at the checkout lines with large baskets filled with groceries. I can't remember the last time I have ever seen that in a Tom Thumb. Even during their busiest periods, Tom Thumb stores only have a fraction of the number of shoppers one finds in an HEB. And most of those shoppers go through the checkout lines with handheld baskets with just a few items in them. Some shoppers have grocery carts - but you don't see them loaded the way that one does at an HEB.
And, of course, there is a reason. Tom Thumb's prices are high and, sometimes even
absurdly high to the point they are almost comedic. Filling a grocery basket at Tom Thumb would quickly add up to a number of extra dollars versus elsewhere that most people would not regard as insignificant.
I suspect that the reason that their remaining stores have managed to survive is because they essentially function as large convenience stores. If a Tom Thumb/Randalls happens to be nearby and one only needs a handful of items, even though the prices might be absurdly higher, on a handful of items the savings of going to a Walmart or an HEB instead wouldn't justify the extra driving, time and hassle. But if one needed to buy a lot of items and was at all conscious about price, then the
last place one would want go would be a Tom Thumb/Randalls. Plus, as somebody mentioned, if HEB doesn't carry a particular product or brand one likes and Tom Thumb/Randalls does offer it, that would be a reason to go there. In general, however, HEB carries the product selection it does because it is popular with large numbers of Texas shoppers. If Tom Thumb/Randall's overall product selection were in high demand in Texas, then even with its absurd prices, its market share wouldn't be as dismal as it is.