Wal-Mart Has Familiar Company In Mexico

Jun 10, 2004

By George Anderson

It’s been widely repeated in these and other circles that the one company Wal-Mart fears as a competitor is Costco. Could it be the world’s largest retailer may be adding H.E. Butt Grocery Co. to that short list?

H-E-B more than held its own when Wal-Mart’s Supercenters came into Texas. Now the two competitors are facing off once again, but this time in Mexico.

Charles Butt, chief executive of the family-owned company, told Bloomberg H-E-B wants to double the number of stores it has operating in the northern part of Mexico to 20.

“A lot of the tastes are the same on both sides of the river,’ he said. “Having been in the region an extended period of time and having a feel for the customer enables us to be competitive.’

Walmex spokesman Raul Arguelles said, “We’re fully committed to continue growing in the northern part of Mexico because it’s one of the most affluent areas of the country. Now that the American economy is moving and the Mexican economy is also growing again, the numbers clearly show the north is pulling the country ahead.’

Moderator’s Comment: What has H.E. Butt done to successfully complete with Wal-Mart?

It should be noted that H.E. Butt not only competes well in the same market as Wal-Mart, they do so in a market that has more Supercenters than any other
in the country.

Walter Loeb, president of consulting firm Loeb Associates told Bloomberg, H-E-B has “developed a formula to fight the Goliath.” The formula, according to
Mr. Loeb, includes cutting costs, lowering prices and adding more varieties of fresh foods.

George Anderson – Moderator

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