HEB operates a similar model to Costco in being more expensive to the customer in a subtle way, through desirability. Their products are so interesting and appetizing that I go in with the intention of buying $30 of groceries and leave with a $100 load. Many of these products end up as local memes (tortillas, brisket queso, green sauce) they are so desirable.
Wal-Mart is the opposite. I go in to buy groceries and am always astonished to have my trip be like for $27 or something. I usually shop from the outside of the grocery (raw produce) and they are just dirt cheap.
HEB operates a series of upscale Central Market stores that are even more lopsided in price and even more interesting in selection.
As soon as Covid was viewed as a serious threat in the US, they immediately put up plexiglass barriers to protect their cashiers. Immediately and not just half assed barriers. They did as good of a job as I would have done if I were the cashier. Then they transformed their stores to have more warehouse space and ran a free curbside pickup service. All of this and they are still the best grocery store in TX if you care about prices and wide selection of products.
The history of HEB is something I want to learn about. I know from reading Robert Caros LBJ volumes that Howard Butt was funneling a lot of money to LBJ staring in the 30s or 40s. Not to judge that, I’m just curious how they dominated Texas.
My dad worked for HEB for 35 years. He never planned to stay there when he started in the late eighties, but they had better hours than his prior work as a photojournalist and treated him a whole lot better.
HEB believes that if you treat your employees right, that they will in turn treat their customers well.
As someone that has spent years living away from HEB they are just a great store to have access to. Better prices, store brands that are often better than national, and they usually have a good produce selection. When we moved to the San Antonio area a decade ago, having access to HEB again was one of the most exciting parts of the move.
Same here. After 7 years out of state, I moved back to TX and was at HEB almost every day to marvel at the selection of products and ready to eat foods (was also single).
I haven’t lived in Texas for about 10 years now, anytime my mom comes to visit and she asks “can I bring you anything?” - I always ask her to bring me a couple packages of HEB tortillas. The multiple mentions of the tortillas in this story has me salivating.
Yes they treat us very well. I had a coworker who suffered from addiction and every few weeks they reached out to see if they were okay. This went on for two years until they quit.
Literally if you are willing to work they will hire you. Alot of my family and friends have started their careers here and they love it.
Unsurprisingly the way they treat employees also means that the talent pool in corporate is excellent. Employees are very invested in the company's future.
The biggest difference I’ve noticed is HEB has plenty of employees who don’t seem depressed to be there.
When I’ve been to HEB I see plenty of cashier lanes open, each with a cashier and bagger, people stocking aisles, a team behind the butcher and bakery counters, etc.
By comparison, Kroger seems to try and have a skeleton crew at all times. Usually a single cashier, a self checkout supervisor, and a couple of people frantically stocking.
The Kroger employees look over worked and clearly unhappy to be there.
The HEB employees seem generally happy and are usually in groups chatting with coworkers and customers while they work.
Shopping at Kroger feels almost dystopian relative to HEB.
Yep. And they don't charge much of a premium to deliver this. I can buy things at HEB and not worry about them being expired/etc, even for grocery pickup. Kroger, afaict, _chooses_ the expiring/broken stuff if you do grocery pickup. Kroger is closer to me so I've given it several chances, but every time they seem to get me in a new way to get me with opened, expired, or damaged stuff, and I won't be bothered to establish a quality control process just to buy some groceries. Meanwhile I've done grocery pickup from HEB for a couple years now and have maybe 3-4 things I've had to request a refund. The whole foods near me is heading down the Kroger route too.
It's literally just doing the core service better than average and allowing it to yield results. "hmmm lets try not scamming people so we can save pennies on some expired bell peppers in a loss leader area to begin with... Perhaps they'll also pick up some prescriptions while they are here! Heck, I bet if we make some effort to keep our employees relatively happy, customers might also have a better experience in our stores!"
IMO/rant, few businesses/people seem to grasp this and all think there is some magic "business hack" they can do while avoiding doing the core business thing well. And I don't think it's that they don't know it, it's the divorce between the reality they themselves likely desire to live in and experience, and the reality they build/provide day to day in their work. But, that plagues everything these days tbh. Nobody just wants to do the fundamentals well, everyone is looking for "this one simple hack" that alleviates having to just do the work. The calculator might save you some money, but it'll never, by itself, extract the gold from the mine.
It’s interesting that the private supermarkets (TJs, HEB) seem to both follow this happy and overstaffed model, and the public ones (Kroger, Albertsons/Safeway) do the opposite.
Albertson’s adds insult to injury by overcharging for everything. Tomato? $4.99/lb please.
Publix is also on that first list, of happy and overstaffed and privately owned. I do most of my shopping there and it's much more pleasurable than Kroger or Walmart.
They are not serving the same customers. HEB operates in a state that has exploded economically for quite a few decades, and where people have large, growing families that cook a lot.
TJs and Costco also have similar fan bases, but they restrict their stores to the richer side of town.
Kroger and Albertsons, however, have operations in many stagnant or declining areas, saddled with union contracts from a long time ago when those places were not stagnant. Household sizes and hence the utility of full service grocers have fallen precipitously for many of their stores.
There is certainly a component of HEB’s leaders choosing to not squeeze a short term profit now, but they wouldn’t be able to do it if Walmart and Kroger could eat their lunch because their customer base was declining in numbers and purchasing power.
Hell, even Kroger and Albertsons’ customer base is declining in purchasing power which is why not Aldi and Lidl are wrecking them wherever Walmart hasn’t.
> few businesses/people seem to grasp this and all think there is some magic "business hack" they can do while avoiding doing the core business thing well.
Unfortunately , it seems to work for Kroger.
As customers we hate it, but Kroger sells something like 20% of all groceries in the US, and HEB is a s small by comparison regional grocer
Safeway and its nationwide equivalents are the epitome of this. These stores haven’t changed since at least when I was a kid in the 80s. They end up selecting for the most desperate employees because they treat them so badly.
Kroger is one example. Most other stores in Texas had the same depressed skeleton crew feel, except for higher end options that cost 3x normal groceries.
Same thing for Bucee’s compared to normal gas stations.
Bucee’s popularity exploded by asking “what if we paid someone to clean the bathrooms at a gas station” and following the logical chain of thought from there.
People like spending money at businesses that aren’t depressing or gross to be in.
Their gas is priced competitively. Everything is hard to compare because it's usually not even available aty other gas stations. It's like half of a Bass Pro Shops tacked on to a bizarre bbq restaurant that lacks seating. Comparing it to 7-11 or a Sinclair or Conoco gas station makes little sense. It's closer to a Love's Travel Center, and in which case their pricing holds up.
The HEB across the street from me took down their kitchen and installed a pizza oven and now they just sell pizzas. They're good pizzas but I do miss the Tex-Mex.
They still have an "Asian" market too but it's far too expensive for what it is, mostly sushi with various kind of goop drizzled on top.
I go to Texas to visit family and a visit or two to H-E-B is usually a part of that. They operate great stores, they treat their employees well (several family members have worked there) and they have great products. I love my local grocery store where I shop but H-E-B is pretty much next level.
> It has been more than a century since the American legal system told publicly-owned companies "Don't Be Good"
The American legal system did no such thing in the Dodge ruling: as stated in the Wikipedia article itself, the 'pay shareholders' idea was in the obiter dictum (non-binding remark) portion.
And as recently as Burwell v Hobby Lobby, the Supreme Court said:
> While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so. For-profit corporations, with ownership approval, support a wide variety of charitable causes, and it is not at all uncommon for such corporations to further humanitarian and other altruistic objectives.
Literally, you are kinda correct about Dodge. Practically, not so much. The court's judgement quite effectively ordered to Ford to abandon his rather pro-social plan, the keystone of which was dramatic corporate growth, in favor of giving his minority shareholders a big hunk of the money (needed for that plan) ASAP.
The difference between that decision and "Don't be Good" is that if you have zero greedy shareholders, or are ready for a protracted and uncertain legal battle against them, then you might get away with being good. Otherwise - make sure any seeming good you do is some combination of de minimis and trivial to defend as a tactic to maximize shareholder profits.
(Hobby Lobby is a decision about about closely-held and privately-held corporations, when they are claiming strong religious reasons for policies which a majority of the Supreme Count Justices have very obvious ideological reasons to favor. And also have both the motive and resources to spends years fighting through the Federal Court System. The relevance to 99.99% of the decisions made by corporations is very close to nill.)
The share buybacks help offset these big companies’ RSUs for highly compensated employees. The share buybacks also allow shareholders to have a taxable event when they want to, not when the business wants them to.
It would be crazy not to do share buybacks for a growing business.
True. Family-owned is "allowed to be good". Not "motivated". And bluntly put, the vast majority of businesses are running on thin margins - they couldn't pay well for reasonable work if they wanted to.
I don’t think that ruling distills down that far. But I will grant you that if you’re leaving enough obvious money on the table, activist investors will come knocking.
> Why does H-E-B do so many nice things for the state? But: Why aren’t more companies like H-E-B?
Regardless any sort of legal principle, the fact is capitalism rewards exploitation. The more a company exploits, the more profit it can bring in. Whether that be worker or customer.
While it's not stated that way in business management courses, that's exactly how it's taught in a round about way. The entire business class is chasing after efficiency, how to do more with less. And their idols are the likes of Walmart who will shut down a store if anyone says "union" and who aggressively negotiates for tax breaks in every location where their stores go up.
But further, venture capitalists have learned that one of the most effective ways to extract capital is to purchase well respected brands and destroy their quality while sucking off every last bit of value before customers wise up to the impending death of a beloved brand (see Sears, KMart, and basically all of fast food at this point. Also, be prepared to see this in your vet, dentist, and retirement homes).
People make millions doing these awful things which is why they keep happening. It's simply a lot harder and less profitable to make a "good" company which makes good products and respects their customers. And if H-E-B ever sells to a 3rd party, exactly the same thing will happen to them in a heartbeat.
> The more a company exploits, the more profit it can bring in.
In the short run, that doesn't seem worth arguing with.
It isn't clear whether or not it is really true in the long run. If shareholders (and courts) demanded the long view, it's equally unclear if the exploitation approach could really have taken hold.
It's worked great for walmart for several decades now.
And the venture capitalists continue to use the plunder from prior pillaging to continue the exploit train.
And further when a company achieves monopoly or near monopoly status, it becomes nearly impossible for a competitor to knock them off their perch.
The unfortunate thing is for the people engaged in exploitation this is a great long term strategy. A CEO that does this can almost always land another job as a CEO for another company to rinse and repeat the process. See Mark Hurd.
The Butts are some good people. When I was a kid in Central Texas my family shopped at their stores. It was a real drag to move to a part of Texas outside their operating range and spend so many years there so their recent expansion across the state is the one welcome thing about Texas.
HEB and their upscale Central Market are the only grocery stores that we visit. We do drop by World Market occasionally for oddball things but if we don't grow it and HEB/CM doesn't sell it we probably aren't eating it.
I think one of the best things about the new HEBs is the attached BBQ store. Dependably good BBQ options with a Central Texas BBQ flavor that beat all of the fast food options locally. We have a wide selection of fast foods since this region is in a massive growth stage absorbing all the FtW refugees. HEB BBQ and the other fresh meals available inside that take little or no prep are dependable, flavorful, options for quick meals and picnics.
Locally we have Walmart, Target, Albertsons, Brookshires, Winn Dixie(?), Aldi, and maybe a couple other smaller ones including some Dollar (G/T) stores for groceries. Walmart is the only one that offers similar options but the quality of their fresh stuff can't measure up. Albertsons was the go-to for years if we had to swing into town for groceries and didn't feel like adding the extra commute to FtW Central Market. We stopped going there after we took a rafting trip down the Salmon in Idaho and rounded a curve in the river and found a large vacation home built right up on the bank complete with a concrete boat ramp. The river guide told us the house was a vacation home owned by the Albertsons grocery store family and that it was vacant most of the year. The concrete ramp is not allowed on any stretch of the river since it is in a Wild and Scenic area but it was built anyway because the sanction for building the ramp was a simple annual fine, easily affordable for billionaire grocers. We had rafted that river several times over the years and the encroachment of second homes and vacation homes on all the high spots up there really degrades the wilderness feel.
I'm not going too far down that trail today since that is too far OT.
If you're in Texas, HEB is the grocery store. The others suck balls.
My favorite thing was when the largest HEBs had garden centers. They had a selection of native plants that you would only find at local specialty $$$ nurseries at fair prices. I wish they would bring these back. I would start in the garden center and they by the time I found all kinds of new things I didn’t know that I needed in the rest of the store, I’d get a where the f are you call from my wife because it was 2 hours later.
I understand how this works with the wife. I "graze" the store when I go by myself though I do carry a list of things to pick up. The local store has a wide selection of Texas native plants at good prices. Some of these plants I had never heard of and I am in the process of restoration of my own property so it was good to see something at HEB and pull up the NPSoT (Native Plant Society of Texas) data on it to find that it used to be common in the region before development. Their garden products are also competitively priced - wood chips and mulch, garden soils, etc.
In Houston they also sell boiled crawfish by the pound during crawfish season so you can have a big crawfish dinner with you and your friends without the whole process of making them yourself.
The catch is that, like the crawfish, their BBQ is pretty mid. So if you want great BBQ, you gotta drive a mile or two to a real BBQ place. But if you want some brisket before you do your grocery shopping, it hits the spot.
I'm not gonna argue the quality of HEB BBQ since it obviously stands on its own merits among Texas shoppers. The meat that I smoke at home is better than any that I have bought at a BBQ joint or stand in the country outside of this one stand in Greenville, Mississippi. While working there, I made sure that I stocked up on meats every day. That man had it down. I've been eating BBQ since I was a small child and I'm on the downhill side of life right now.
I would rate their BBQ equal to anything else you'll find in Austin, except maybe Franklin BBQ, which I don't have the patience for, so I haven't tried it nor will I bother.
> We stopped going there after we took a rafting trip down the Salmon in Idaho and rounded a curve in the river and found a large vacation home built right up on the bank complete with a concrete boat ramp.
The Albertsons founding family and heirs has had nothing to do with Albertsons grocery stores for at least 20 years.
If I were you, and if the information above was true, my beef would be with the government and the voters.
Randy Feltface (Australian puppet comedian) was absolutely blown away by HEB when he came to Texas. Apparently, they have nothing like that in Australia.
I want someone to start a monthly subscription service that mails HEB tortillas within the continental US using UT Austin students as the smurfs. The ad copy writes itself.
The difference is that cook them in something cast iron pan like with lard the way my grandmother did. In her case, big ass can of crisco. I bet a lot of people would be turned off if they realized that, but there ain’t no way around it for the taste.
I kind of enjoy grocery store/chain discussions on e.g. national subreddits because it's a way of engaging people normally not into economics, corporate structures and incentives and getting them to actually think about the topics.
Sweden: The dominant one is called ICA. Shared brand and supply chain. Stores are locally owned, typically 1, maybe 2 stores per owner. Store owners own a share of the centralized aspects. Customers generally prefer it, except for those on the (quite) left. It often becomes a political charged debate topic on a national level.
People do seem to at least eventually understand that local ownership is good since it translates into caring.
The charges from the left: a) Possibly valid: They have gotten too good/dominant, b) Just stupid: "They are ripping people off with their 2% profit margins".
Wal-Mart is the opposite. I go in to buy groceries and am always astonished to have my trip be like for $27 or something. I usually shop from the outside of the grocery (raw produce) and they are just dirt cheap.
HEB operates a series of upscale Central Market stores that are even more lopsided in price and even more interesting in selection.
The history of HEB is something I want to learn about. I know from reading Robert Caros LBJ volumes that Howard Butt was funneling a lot of money to LBJ staring in the 30s or 40s. Not to judge that, I’m just curious how they dominated Texas.
HEB believes that if you treat your employees right, that they will in turn treat their customers well.
As someone that has spent years living away from HEB they are just a great store to have access to. Better prices, store brands that are often better than national, and they usually have a good produce selection. When we moved to the San Antonio area a decade ago, having access to HEB again was one of the most exciting parts of the move.
Literally if you are willing to work they will hire you. Alot of my family and friends have started their careers here and they love it.
Unsurprisingly the way they treat employees also means that the talent pool in corporate is excellent. Employees are very invested in the company's future.
I could go on but yes they are good.
When I’ve been to HEB I see plenty of cashier lanes open, each with a cashier and bagger, people stocking aisles, a team behind the butcher and bakery counters, etc.
By comparison, Kroger seems to try and have a skeleton crew at all times. Usually a single cashier, a self checkout supervisor, and a couple of people frantically stocking.
The Kroger employees look over worked and clearly unhappy to be there.
The HEB employees seem generally happy and are usually in groups chatting with coworkers and customers while they work.
Shopping at Kroger feels almost dystopian relative to HEB.
It's literally just doing the core service better than average and allowing it to yield results. "hmmm lets try not scamming people so we can save pennies on some expired bell peppers in a loss leader area to begin with... Perhaps they'll also pick up some prescriptions while they are here! Heck, I bet if we make some effort to keep our employees relatively happy, customers might also have a better experience in our stores!"
IMO/rant, few businesses/people seem to grasp this and all think there is some magic "business hack" they can do while avoiding doing the core business thing well. And I don't think it's that they don't know it, it's the divorce between the reality they themselves likely desire to live in and experience, and the reality they build/provide day to day in their work. But, that plagues everything these days tbh. Nobody just wants to do the fundamentals well, everyone is looking for "this one simple hack" that alleviates having to just do the work. The calculator might save you some money, but it'll never, by itself, extract the gold from the mine.
Albertson’s adds insult to injury by overcharging for everything. Tomato? $4.99/lb please.
TJs and Costco also have similar fan bases, but they restrict their stores to the richer side of town.
Kroger and Albertsons, however, have operations in many stagnant or declining areas, saddled with union contracts from a long time ago when those places were not stagnant. Household sizes and hence the utility of full service grocers have fallen precipitously for many of their stores.
There is certainly a component of HEB’s leaders choosing to not squeeze a short term profit now, but they wouldn’t be able to do it if Walmart and Kroger could eat their lunch because their customer base was declining in numbers and purchasing power.
Hell, even Kroger and Albertsons’ customer base is declining in purchasing power which is why not Aldi and Lidl are wrecking them wherever Walmart hasn’t.
Unfortunately , it seems to work for Kroger.
As customers we hate it, but Kroger sells something like 20% of all groceries in the US, and HEB is a s small by comparison regional grocer
This is probably just a 'Kroger vs nice supermarket' thing.
Same thing for Bucee’s compared to normal gas stations.
Bucee’s popularity exploded by asking “what if we paid someone to clean the bathrooms at a gas station” and following the logical chain of thought from there.
People like spending money at businesses that aren’t depressing or gross to be in.
They still have an "Asian" market too but it's far too expensive for what it is, mostly sushi with various kind of goop drizzled on top.
> ... in this company’s nearly 120-year history, it’s remained family-owned and operated.
It has been more than a century since the American legal system told publicly-owned companies "Don't Be Good"
https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.
The American legal system did no such thing in the Dodge ruling: as stated in the Wikipedia article itself, the 'pay shareholders' idea was in the obiter dictum (non-binding remark) portion.
And as recently as Burwell v Hobby Lobby, the Supreme Court said:
> While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so. For-profit corporations, with ownership approval, support a wide variety of charitable causes, and it is not at all uncommon for such corporations to further humanitarian and other altruistic objectives.
* http://caselaw.findlaw.com/us-supreme-court/13-354.html
* https://en.wikipedia.org/wiki/Burwell_v._Hobby_Lobby_Stores,....
The difference between that decision and "Don't be Good" is that if you have zero greedy shareholders, or are ready for a protracted and uncertain legal battle against them, then you might get away with being good. Otherwise - make sure any seeming good you do is some combination of de minimis and trivial to defend as a tactic to maximize shareholder profits.
(Hobby Lobby is a decision about about closely-held and privately-held corporations, when they are claiming strong religious reasons for policies which a majority of the Supreme Count Justices have very obvious ideological reasons to favor. And also have both the motive and resources to spends years fighting through the Federal Court System. The relevance to 99.99% of the decisions made by corporations is very close to nill.)
It would be crazy not to do share buybacks for a growing business.
Regardless any sort of legal principle, the fact is capitalism rewards exploitation. The more a company exploits, the more profit it can bring in. Whether that be worker or customer.
While it's not stated that way in business management courses, that's exactly how it's taught in a round about way. The entire business class is chasing after efficiency, how to do more with less. And their idols are the likes of Walmart who will shut down a store if anyone says "union" and who aggressively negotiates for tax breaks in every location where their stores go up.
But further, venture capitalists have learned that one of the most effective ways to extract capital is to purchase well respected brands and destroy their quality while sucking off every last bit of value before customers wise up to the impending death of a beloved brand (see Sears, KMart, and basically all of fast food at this point. Also, be prepared to see this in your vet, dentist, and retirement homes).
People make millions doing these awful things which is why they keep happening. It's simply a lot harder and less profitable to make a "good" company which makes good products and respects their customers. And if H-E-B ever sells to a 3rd party, exactly the same thing will happen to them in a heartbeat.
In the short run, that doesn't seem worth arguing with.
It isn't clear whether or not it is really true in the long run. If shareholders (and courts) demanded the long view, it's equally unclear if the exploitation approach could really have taken hold.
It's worked great for walmart for several decades now.
And the venture capitalists continue to use the plunder from prior pillaging to continue the exploit train.
And further when a company achieves monopoly or near monopoly status, it becomes nearly impossible for a competitor to knock them off their perch.
The unfortunate thing is for the people engaged in exploitation this is a great long term strategy. A CEO that does this can almost always land another job as a CEO for another company to rinse and repeat the process. See Mark Hurd.
HEB and their upscale Central Market are the only grocery stores that we visit. We do drop by World Market occasionally for oddball things but if we don't grow it and HEB/CM doesn't sell it we probably aren't eating it.
I think one of the best things about the new HEBs is the attached BBQ store. Dependably good BBQ options with a Central Texas BBQ flavor that beat all of the fast food options locally. We have a wide selection of fast foods since this region is in a massive growth stage absorbing all the FtW refugees. HEB BBQ and the other fresh meals available inside that take little or no prep are dependable, flavorful, options for quick meals and picnics.
Locally we have Walmart, Target, Albertsons, Brookshires, Winn Dixie(?), Aldi, and maybe a couple other smaller ones including some Dollar (G/T) stores for groceries. Walmart is the only one that offers similar options but the quality of their fresh stuff can't measure up. Albertsons was the go-to for years if we had to swing into town for groceries and didn't feel like adding the extra commute to FtW Central Market. We stopped going there after we took a rafting trip down the Salmon in Idaho and rounded a curve in the river and found a large vacation home built right up on the bank complete with a concrete boat ramp. The river guide told us the house was a vacation home owned by the Albertsons grocery store family and that it was vacant most of the year. The concrete ramp is not allowed on any stretch of the river since it is in a Wild and Scenic area but it was built anyway because the sanction for building the ramp was a simple annual fine, easily affordable for billionaire grocers. We had rafted that river several times over the years and the encroachment of second homes and vacation homes on all the high spots up there really degrades the wilderness feel.
I'm not going too far down that trail today since that is too far OT.
If you're in Texas, HEB is the grocery store. The others suck balls.
Not a Texan, just visited occasionally.
This sentence more than anything has just made me want to become a Texan. I did not know this was a thing, but that sounds amazing.
The catch is that, like the crawfish, their BBQ is pretty mid. So if you want great BBQ, you gotta drive a mile or two to a real BBQ place. But if you want some brisket before you do your grocery shopping, it hits the spot.
The Albertsons founding family and heirs has had nothing to do with Albertsons grocery stores for at least 20 years.
If I were you, and if the information above was true, my beef would be with the government and the voters.
Two constants in Texas: HEB and Waffle House.
Sweden: The dominant one is called ICA. Shared brand and supply chain. Stores are locally owned, typically 1, maybe 2 stores per owner. Store owners own a share of the centralized aspects. Customers generally prefer it, except for those on the (quite) left. It often becomes a political charged debate topic on a national level.
People do seem to at least eventually understand that local ownership is good since it translates into caring.
The charges from the left: a) Possibly valid: They have gotten too good/dominant, b) Just stupid: "They are ripping people off with their 2% profit margins".
(/s)