DALLAS — In November, business publications speculated on H.E. Butt Co. making a move in the Dallas market.
The San Antonio-based operation has a strong hold in central and southern Texas, but is limited to its four gourmet Central Markets in Dallas-Fort Worth.
When the company announced this summer it planned to build a new distribution center in Temple, about 2 hours south of Dallas, rumors that HEB stores were moving northward gained strength.
The San Antonio Business Journal reported in November the company was “ready to expand” to the DFW Metroplex.
Saying it was “too soon to tell what (store concept) we would do in Dallas,” director of public affairs Dya Campos told the Journal the chain is “surveying the area and looking for potential sites.
“It is something we are considering heavily and a market we hope to be in, in the near future,” she said.
The company broke ground in August on a 450,000-square-foot distribution center in Temple that it says will service stores in Austin and Dallas. It maintains two other produce distribution centers — in Houston and in San Antonio.
A lot of stores are fighting for market share in Dallas, said retail analyst David Livingston of Pewaukee, Wis.-based DJL Research.
“Wal-Mart now dominates Dallas-Fort Worth with about 40% market share,” he said.
“Super Target has about 5%. That means there are a lot of store fighting for the remaining 55% right now and there are just too many.”
Livingston said Cincinnati-based Kroger Co. has about 15%, Tom Thumb (owned by Pleasanton, Calif.-based Safeway Inc.) has about 10% and Albertsons has about 9%.
“Tom Thumb and Albertsons will probably not survive for much longer,” he said.
“My guess is HEB knows they are on life support and a move into the market would be a fatal blow to them both,” he said.
“HEB is rock solid all around Texas, and Dallas-Fort Worth is one of their last areas to conquer.”
H.E. Butt could not be reached for comment. Winell Herron, HEB’s group vice president of public affairs, diversity and environmental affairs, told a trade publication the expansion will focus on the Central Market format.
HEB has eight Central Markets — four in Dallas/Fort Worth, two in Austin, one in San Antonio and one in Houston.
Deep discounters duke it out
Smaller format stores such as Eden Prairie, Minn.-based Supervalu Inc.’s Sav-A-Lot entered the market with about a dozen stores and Batavia, Ill.-based Aldi Inc. also is entering the market in 2010.
Aldi is finishing construction on a new distribution center in Denton, and plans to open 30 new stores in Texas in 2010, said Heather Tarczan, a spokeswoman for the company.
“Our first stores will be opening in the Dallas/Fort Worth area beginning in March,” she said.
Sav-A-Lot will have a tough challenge with Aldi in the picture, Livingston said.
“Aldi will just come in and blow by them,” he said.
“Sav-A-Lot is no match for Aldi, so I don’t expect to see them add many more stores.” he said.