Marketing H-E-B

Executive Summary

The H-E-B wholesale food store is a San Antonio-based supermarket chain with over 315 stores throughout Texas and Mexico. They have a strong dominance in the Texas region (nearly 55 percent of the market), and are particularly strong in the San Antonio-Austin-Houston areas. The mission of H-E-B is to be a major provider of fresh and healthy foods and offered to customers at affordable prices. This research aims to provide substantial evidence that H-E-B should provide a home delivery system with an online purchasing website. Under this new service, customers can select their orders on line and have their groceries delivered to their homes without having to make a trip to the actual store location. This new delivery service will help H-E-B gain a competitive advantage by making effective use of current technology (e-commerce). The underlying issue that the H-E-B team needs to address is how will they find new ways to differentiate themselves when so many other retailers (non-traditional supermarkets) are entering the grocery market? The external threat to H-E-B is that conventional supermarkets associated with grocery shopping have lost a large part of their market share to retailers like Wal-Mart Supercenters, Costco, Sam’s Club, Target, and even a variety of dollar stores. Alternative shopping options have continued to increase; even convenience stores have now entered this competitive space. As of 2001, Wal-Mart became the largest seller in food. An article by Thom Imlay (2006) cites, “the traditional supermarket industry is faced with the challenges of maintaining market share and profits while attempting new concepts and store formats in an effort to differentiate themselves from other types of retailers”. Furthermore, Imlay mentions that major demographic and consumer lifestyle changes have affected not only how customers shop, but also how they chose to shop and eat their meals. The main strategy is for traditional supermarkets to cut costs...