Fernando Martínez, general director of HEB México , does not struggle much to find an analogy that reflects the rapid growth in recent years of the supermarket chain he is in charge of. However, as in other of his answers in a long telephone interview, he emphasizes words like “moderation”, “caution” and “care” first.
“We have always been a company cautious of the market we are going to enter,” says the industrial engineer from UNAM, after pondering for a few seconds the question about its expansion in the north and the Bajío. “We go drop by drop, but like a drop of water that begins to expand.”
HEB, a Texas chain founded in 1905, arrived in Mexico via Nuevo León in 1997, with a single store. Since then, its success in the north of the country has been such that its name is ingrained in the culture of the region: it is not difficult to associate it with roast meat, cold beer and other consumption habits. Even, and in order not to enter into controversies impossible to reconcile, it sponsors the two Monterrey soccer teams, Tigres and Rayados. Even so, Martínez insists that the brand is much more than that.
Twenty-five years after that first drop, HEB employs more than 17,000 people and has 74 physical stores distributed in seven states: Nuevo León, Coahuila, Tamaulipas, San Luis Potosí, Aguascalientes, Guanajuato and Querétaro. Of that total, 54 exist under the HEB brand, 19 with Mi Tienda del Ahorro, focused on lower-income customers, and three more as Market Prime, which offers higher-end products. In addition, it has two stores for exclusive e- commerce service.
The opening strategy
In 2021, HEB opened five new branches, in line with its plan to open between four and five locations a year, a slower rate than that of several of its competitors, but which, according to Martínez, is one of the keys to consolidate in markets so different in consumption habits.
“For us, a border began in San Luis Potosí,” he says. “Getting to León or Querétaro was an additional challenge to those we had in Monterrey or Saltillo, (…) we learned to have a regional touch and to make our formula elastic.”
This means that, in addition to careful selection of products, special attention is paid to how they are displayed or advertised in order to be more effective in selling them. As an example, Martínez uses a very appropriate case for the brand.
“Roasted meat for the client in Monterrey is a daily activity, it is a very special event, which he always does, shows off, makes him proud and, for this reason, it is easy to sell him products such as grills or meat utensils,” he says. “In Querétaro there is a part that is familiar with it, but not all, so they require a special offer for their consumption between one week and the next.”
If getting Queretanos to make more carne asada is an achievement, the numbers complement the good pace of HEB. In 2021, according to the company, total sales amounted to 45,000 million pesos, which consolidate sustained growth despite the pandemic. For this year, the goal of Martínez and his team is to reach 50,000 million. The chain’s average ticket also shows good news, as it is around 600 pesos in the more than 80 million annual visits it receives, after a slight drop to 530 pesos during confinement.
Speaking of the pandemic, Martínez assures that, beyond the common challenges for his sector, it accelerated the growth plans of the Pick and Go modality, which allows customers to buy online and pick up their products at any of the physical stores. , as well as more traditional home delivery.
“The pandemic gave us a first notice of change,” says the manager. “We don’t wait for a second.”
In 2021, according to company data, 144,000 customers were served digitally and 800,000 Pick and Go operations and home deliveries were completed. Those numbers contributed to double-digit same-store growth last year.
Another component of HEB’s success, adds Martínez, is the variety of products offered, including its own brands, which total more than 19,000 in its catalog. Last year alone, the chain launched 937 items and another 3,493 seasonal items. “Our products are an essential part of generating a true shopping experience,” he says. “The smells, flavors, the discovery of new products add to the attractiveness of our brand.”
The exclusivity also and for this reason they maintain a portfolio of 80 controlled brands and for which HEB has the marketing rights. From kitchen towels and charcoal to dressings, sauces and condiments, the three letters of the chain flood the shelves of its branches.
As careful as it is to expand, HEB has reached the point where it is looking for alternatives to facilitate its logistics, a complex delivery network that, for now, only has a full-scale distribution center in the municipality of Escobedo, Nuevo León. , while in Izcalli, State of Mexico, it rents another smaller center that supplies a maximum of 20% of the total merchandise, mainly fruits, vegetables and groceries, to branches from Bajío to Tampico.
However, the collection and distribution of products is not always the most efficient. “There is merchandise, for example, that comes from Kimberly-Clark, from its plant in San Juan del Río (Querétaro), which sees the trailers go by to the Escobedo distribution center and then goes back down to the state branches,” Martinez says. “That’s not too expensive.”
Although the manager affirms that, for the moment, they can maneuver with this way of working, a new full-scale distribution center is already in the plans, whose headquarters could be precisely Querétaro, although nothing has been defined yet.
“It will be a game changer , although we have to study the current Bajío stain,” he explains. “We have time to resolve clearly until 2025 and 2026, between now and then, it is a matter of analyzing the best option.”
In addition to logistics, Martínez is worried about another thing whose solution is not in his hands: inflation. Without giving too many details, he explains that part of the growth registered in its sales has to do with the rise in prices, which in recent months has been placed at levels well above the Bank of Mexico’s goal of 3%. According to INEGI data, in recent weeks, inflation has remained above 7% and the central bank’s forecasts show no signs of letting up, at least this year.
“It’s extremely worrying,” he says. “Yes, we are dismayed by the rise in sales due to inflation.”
At the end of the call, Martínez insists on recognizing the people who work at HEB as a key part of the brand’s expansion. “We are firm with our vision of being the best place to work, to buy and to do business,” he says. “And our mission to elevate the quality of life for partners, customers, suppliers and our communities is also strong.”
If the drop expands, he says, it is because there is a tide of good work behind it.
