Case Study : Butts Grocery Company

801 Words Sep 21st, 2016 4 Pages
Company Overview:
The H.E. Butts Grocery Company (H-E-B) is a private and family-owned grocery chain headquartered in San Antonio, Texas. H-E-B operates in multiple cities in Texas, along with stores in Mexico and one city in Louisiana. As of the 2002 case publish date, H-E-B was the 11th largest grocery chain in the United States, with sales exceeding $9 billion from over 275 stores. The company was founded in 1905 by Florence Butts in Kerrville, Texas and was taken over by eldest son Howard, who experienced several failures in opening new stores; however, he was able to successfully open a second store, located in Del Rio, Texas, in 1927. Howard Butt’s youngest son, Charles, became president of H-E-B in 1971 and maintains this position today. As of 2015, H-E-B had over 370 stores and generated approximately $23 billion in revenue.

Industry Overview:
The company focuses on three major objectives: profitability, sales growth, and building deeper customer relationships by positioning stores to offer quality products at low-cost pricing. Currently, H-E-B is facing increasing competition from companies such as Wal-Mart, which has decided to enter the grocery industry with two different store offerings. One format is called “supercenters,” which offer grocery products in collusion with mass merchandise offerings. Other major discount retailers such as Target and Kmart have followed the same concept. The other format is the Wal-Mart’s “Neighborhood Market,” which…

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