H-E-B is right at home with its new shop-in-shop concept

Discussion
Photo: H-E-B
May 17, 2022

Visitors to one H-E-B store location can now purchase home goods while shopping for groceries, and if the Texan grocery giant continues with its current plans, visitors to many more of its stores will soon be able to, as well.

An H-E-B location in New Braunfels, TX, recently opened up its first Home by H-E-B department, according to KSAT News. The store-within-a-store offers products under two brands, Haven + Key and Texas Proud. The product assortment consists of items such as candles, throw pillows, textiles, accent furniture and home décor. Texas Proud, in particular, will bring in products from local artisans and businesses, such as antler art from Converse, Texas-based Broken Antler.

H-E-B is right at home with its new shop-in-shop concept
Photo: H-E-B

H-E-B intends to expand the Home by H-E-B concept into 25 stores by the end of 2022 and into more than 100 stores within three years, according to the Houston Chronicle. The New Braunfels store is also the first H-E-B location to contain a two-story True Texas BBQ restaurant.

With more than 360 stores all located throughout the state of Texas, H-E-B is the fifth largest supermarket operator in the U.S., according to Supermarket News. The grocery chain also operates a number of restaurants and food-to-go dining concepts. In 2018 it acquired a local food delivery service, Favor Delivery, which it folded into its operations.

In late 2021, H-E-B partnered with James Avery Artisan Jewelry to offer another non-food category, opening jewelry shops inside of a few locations, according to PYMNTS.

The chain is also pursuing an expansion of its healthcare presence.

The opening of two new H-E-B Wellness Primary Care clinic locations this month represent the start of a “rapid” expansion of the standalone concept, according to Supermarket News. The concept is focused on providing straightforward and affordable care, does not require insurance and offers the option of a monthly subscription. Locations are staffed by board-certified doctors and nurses.

H-E-B is expanding its mainline footprint as well. Its latest move in Central Texas consists of replacing a 67,000 square foot store with one almost twice as big, according to the Austin American Statesman.

DISCUSSION QUESTIONS: Will H-E-B’s customers be drawn to Home by H-E-B? What are the keys to success for retailers — grocers, in particular — when moving into new product categories?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"H-E-B’s latest category foray exemplifies the larger diversification movement at work in retail."
"Although I doubt this expansion will draw in any new customers, it will likely be a nice surprise for its existing ones."
"The opportunity to increase basket size with products other than food and grocery items is abundant."

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8 Comments on "H-E-B is right at home with its new shop-in-shop concept"


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Dave Bruno
BrainTrust

I do think the new H-E-B categories will appeal to their customers because – and this is also key to expansion success – they are looking to align the product mix with the tastes and preferences of local shoppers. Differentiated product assortments (and in my opinion highly localized product assortments), will be the key to finding growth in new categories.

Brian Delp
BrainTrust

This aligns with other grocery-first chains like Meijer. Although I doubt this expansion will draw in any new customers, it will likely be a nice surprise for its existing ones. The success of this will be dependent on their awareness of their base. As a regional retailer they are uniquely positioned to offer hyper-focused merchandising that mass merchants are limited on.

David Naumann
BrainTrust

During the pandemic, our family has appreciated the convenience of one-stop shopping at hypermarkets stores like Fred Meyer. With a great selection of grocery items and a standard assortment of home goods, it provides shoppers the chance to travel to fewer stores. I think the shop-in-a-shop concept allows H-E-B to test the appeal of broadening their product categories. It may lead to potentially expanding the size of store footprints and assortments in select markets to compete with traditional hypermarkets.

DeAnn Campbell
BrainTrust

The average consumer makes at least one trip a week to the grocery store, even if they use online delivery. Grocers, more than any other retailer, are imbedded in the lives of shoppers. That’s a big opportunity for grocers to give their shoppers an expanded ecosystem of products to make their house a home. Grocery stores are central to almost every community and therefore perfectly positioned to be a hub for consumers to test and try a broad range of goods and services.

Jeff Sward
BrainTrust

Grocery stores enjoy the huge advantage of having a higher frequency of visits than any other kind of retail business. The opportunity to increase basket size with products other than food and grocery items is abundant. I remember my first visit to a Loblaws in Canada many years ago and seeing the breadth of baby and toddler apparel then offered. Parents must have rejoiced in the ease of addressing that very fluid need to update a youngster’s wardrobe. Convenience! And with convenience playing the heightened role it does today, supermarkets have a lot of opportunity to save their shoppers trips to other stores. I always thought there were opportunities in apparel and home, but now health care emerges as a logical offering.

Carol Spieckerman
BrainTrust

H-E-B’s latest category foray exemplifies the larger diversification movement at work in retail. Retailers are leaning into category and business model expansion, including services and solutions, in record numbers. By taking a shop-in-shop approach to category expansion, H-E-B is creating visual impact and giving new products a fighting chance.

Georganne Bender
BrainTrust

I love a shop-in-shop concept, especially in grocery stores. The opportunity to capture additional sales is high in spaces where customers are already primed to shop. What will matter is product assortment and merchandise presentation. Both will need to change often so frequent shoppers won’t get bored.

Roland Gossage
Guest
1 month 9 days ago

This is a concept that Canadian grocery stores like Loblaws have already had for several years with good success. US chains, Krogers and Bed Bath & Beyond, recently partnered to offer Kroger customers an extensive selection of the most sought-after goods for the home and baby carried by Bed Bath & Beyond. This will be offered in-store as well as on Kroger.com. With the proper selection of products, this concept is a true winner.

wpDiscuz
Braintrust
"H-E-B’s latest category foray exemplifies the larger diversification movement at work in retail."
"Although I doubt this expansion will draw in any new customers, it will likely be a nice surprise for its existing ones."
"The opportunity to increase basket size with products other than food and grocery items is abundant."

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