‘It’s the best grocery store’: What makes Texas chain H-E-B such a fan favorite

Continuing the crowd work, he asked what the store does that makes it so special. Another person in the crowd shouted, “They stood up in the snowstorm when the government wouldn’t! … They were offering water and heat!” likely referring to the Texas winter storm in 2021 that overwhelmed the state’s power grid. Feltface went on to lead a chant of “H-E-B, H-E-B, H-E-B!”

A video of this moment posted to TikTok this March has since accumulated more than 11 million views. The applause at the comedy club and the virality of the video that followed is just one glimpse of the loyalty and excitement people have for the brand. Another example: Just last Wednesday, a line wrapped around a new H-E-B store near the University of Texas at San Antonio at 6 a.m. for its grand opening. The store includes a barbecue restaurant and a curbside and delivery area with 50 spots, as well as a meat market and a fish market.

“This consistency in the quality of service they deliver is extremely important for building that customer satisfaction,” said Dr. Ashwin Malshe, an associate professor of marketing at the University of Texas at San Antonio whose research focuses on marketing strategy, adding that he’s been a regular H-E-B customer for a decade. Malshe is currently working on research on where customer satisfaction is headed, which he said is especially relevant to H-E-B, as he attributes this metric as critical to the grocer and other successful retailers.

The chain of more than 400 stores operates solely in Texas and Mexico. According to the grocery experts and marketing professors interviewed by Modern Retail, H-E-B is a masterclass for retail operators in developing customer loyalty through thoughtful merchandising, community involvement and a strong local brand approach. Kroger and Walmart are increasingly encroaching upon H-E-B’s territory — or vice versa — and if these retail giants want to succeed in Texas, they’ll have to compete with this popular retailer.

H-E-B historically hadn’t had more than a few stores in the Dallas-Fort Worth area until 2022, when it began rapidly expanding its presence in the area, threatening other large grocery chains such as Kroger and Walmart, the latter of which is now building new stores for the first time in years.

H-E-B now has about a dozen new stores now open or in the works in the Dallas-Fort Worth area. It had previously taken market share from Kroger in Houston over the past couple of decades.

An H-E-B representative declined to provide an executive for an interview.

A saving grace in the Lone Star State

The company is especially known for its connection with and dedication to the local community. As described by The New York Times in 2021 following the devastating Texas snowstorm, “The chain has become known for its logistical prowess — in responding to the coronavirus pandemic and to hurricanes, with stockpiles of water and emergency supplies ready to be deployed.”

Greg Jefferson, business editor of the San Antonio Express-News, wrote in a column in 2021 that many Texans look to H-E-B during disasters “almost as a de facto arm of government.” According to Jefferson, when Hurricane Harvey devastated the Gulf Coast in 2017, H-E-B helicoptered truck drivers from San Antonio to Houston, mapped out alternative routes and directed suppliers to ship directly to stores to keep shelves as well-stocked as possible.

H-E-B remains owned and operated by the family of its founder, Florence Butt, who established the company with a one-room grocery store in her family home in Kerrville, Texas, in 1905, according to the Texas State Historical Association. The company is named after Florence’s son, Howard Edward Butt.

A. David Zoller, evp of retail brokerage at retail real estate firm Weitzman in Dallas, said, because the company is owned by a Texas family, it has more control over its culture and operations than those that have been through numerous corporate grocery mergers.

“H-E-B understands Texas because H-E-B is Texas; that’s the mystique behind it,” Zoller said, adding that H-E-B stores are often among few stores that offer certain products that are key for some local demographics, like kosher meat or specific types of tortillas.

They’re also often massive — some of the chain’s new stores surpass 120,000 square feet.

“There are aspects of H-E-B that give care and feeding to their customer base, however diverse it is,” Zoller said. “Those offerings, and the vast size of the store, make it something unique and special to Texans.”

Customer satisfaction

H-E-B makes its customers happy, and it proves out in customer surveys. A Dunnhumby study measuring both customer perception and financial data found H-E-B to be the No. 1 grocery store in the U.S. in 2024, the fourth time within eight years.

As a customer, UTSA’s Malshe recognizes the chain for having fantastic quality at a very good price, keeping its stores clean, organized, always stocked and noticeably well-lit, with employees always available to assist.

“Walmart is also pretty nicely stocked, and everything is fine, but … I have to go from one end of the store to another end to find [an employee] to talk to. In H-E-B, I never have this problem,” Malshe said.

H-E-B is also lauded by its employees. Earlier this year, H-E-B ranked No. 21 on Glassdoor’s annual list of top places to work, with an average score of 4.2 out of 5 from 13,000 reviews. It also ranked No. 55 on Forbes’s “America’s Best Employers” list.

“If your employees are happy, they are going to provide very good service to your customers,” Malshe said, adding that the company provides tuition support and is known for promoting its employees within the organization.

Erich Kahner, director of strategy and insights in the Americas for Dunnhumby, said H-E-B is unique in that it is known for delivering on savings while also doing things other higher-end regional supermarkets like Publix and Hy-Vee win at, such as employee satisfaction and the store experience. People give H-E-B especially high marks on prices, private brands, promotions and online experience, Kahner said.

“H-E-B manages to capture those things that are typically the domain of retailers who aren’t necessarily trying to win on savings,” Kahner said. “They are trying to win on quality and experience, and they pour a lot of effort into communicating what they stand for.”

Kahner added that private label is also something that helps drive sales. H-E-B’s popular private-label products include freshly made flour tortillas and butter tortillas, Texas-themed ice creams like Texas Starry Night and Texas Campfire, pre-prepared brisket queso dip, and even Texas-shaped tortilla chips.

“It’s such a big part of their portfolio compared to a typical supermarket or almost any retailer,” Kahner said.

Still, unlike Kroger — which competes with the Texas grocer in some markets — H-E-B lacks a loyalty program. Instead, customers pick up paper coupons next to items on the shelves.

“People who are participants of a loyalty program get the benefit of deals and offers that are tailored just to them based on what is important to them, specifically, based on looking at their basket data,” Kahner said. “H-E-B doesn’t do that, and customers recognize that.”

Building the brand

Even within Texas, H-E-B still has a lot of room to grow.

Zoller said local brokers and developers will bend over backwards to get H-E-B into their shopping centers. He declined to get into specifics of what kind of incentives developers may be offering to do so, but said the chain is still unique enough in Dallas to make a strong impact.

“It’s different than having just another Tom Thumb, Albertsons, Kroger. … It’s just something a little bit more unique and more of a draw,” Zoller said. “Developers bend over backwards to get [H-E-B] into their centers, because then they’re going to be able to lease up every other pad, site, strip center, power center, outparcel building and the caddy corner across the street. It creates a buzz.”

Even Feltface, the puppet comedian, was able to describe the buzz of the brand after hearing from his audience members in San Antonio:

“When the government was doing nothing, H-E-B came to the rescue and said, ‘We have an abundance of water, we have heating, come in! And from this day forward, whenever you’re at a comedy show and someone mentions our name, scream like we’re a fucking sporting team!’”