With new stores opening in McKinney and Allen in 2023, HEB accounted for a whopping 22% of all retail construction in DFW last year.
Dallas — Read this article and other North Texas business news from our Dallas Business Journal partners
HEB LP's arrival in Dallas-Fort Worth is sending ripples through the grocery industry, forcing companies that have long dominated the market to take note of the Texas chain with a cult following.
Founded in 1905 and based in San Antonio, HEB operates more than 430 stores in Texas and Mexico. The company is a major force in areas such as Central and South Texas, and has become a retail standard-bearer that attracts other stores.
But HEB has only recently appeared in North Texas grocery stores, with its debut store opening in Frisco in September 2022. The event featured his DJ and high school drum line, and at 6 a.m. he was celebrated with 1,500 people lining up.
On January 11, HEB broke ground on a new store in Melissa, about 40 miles north of Dallas, demonstrating that its expansion in North Texas has been primarily on the urban fringe.
“HEB's investment in Melissa will benefit the entire community and create a welcoming and actively used gateway to a rapidly growing city,” Mabry Jackson, the company's senior director of regional communications, said in an email. mentioned in.
HEB's impact in North Texas extends far beyond shopping aisles and checkout lines. Grocery giants have also been talked about as drivers of new construction and major job creators.
HEB accounts for the majority of retail construction in North Texas
With new stores opening in McKinney and Allen in 2023, HEB accounted for a whopping 22% of all retail construction in DFW last year. That's according to a study conducted by Dallas-based real estate firm Weitzman, which surveyed approximately 1,400 shopping centers in the region.
Commercial construction across DFW in 2023 will total approximately 1 million square feet, which is low compared to historical levels. But Weitzman said occupancy last year hit an all-time high of 95.2%, underscoring that demand for stores in desirable locations remains strong.
HEB, the largest privately owned company in Texas, currently has five stores in the Metroplex, four of which are in Collin County. The company also has an upscale Central Market subsidiary in six of his locations.
“The tremendous growth across the North Texas counties is no secret, and the number of requests from residents to build here has been overwhelming,” Jackson said.
It's no surprise that HEB chose the high-growth area north of Dallas for its first North Texas expansion, said Bob Young, managing director at Weitzman. As the old adage goes, retail follows the roof. Family-friendly suburbs such as Celina, Prosper, and Melissa are seeing a large amount of new housing construction. According to the latest data from the U.S. Census Bureau, Collin County's population has nearly doubled since 2000, reaching more than 1.2 million people and approaching the size of the city of Dallas.
“These rooftop homes occur in both single-family and multi-family homes, so the everyday need they can provide to consumers and grocers is strong,” Young said. “It causes traffic jams.”
The opening of a HEB store in a region rarely happens in isolation. Several developments tend to pop up around his HEB store, including retail stores, restaurants, and other grocery stores. However, Young noted that tough economic conditions are currently hampering some of these plans.
“There will be other developments because of them, but for now, [H-E-B] He’s a player,” he said.
HEB fuels DFW grocery competition
HEB isn't the only grocery company looking to grow in North Texas as a booming population increases demand for groceries.
Weitzman predicted in his annual forecast that 2024 will be the busiest year for grocery store construction in more than a decade, with at least 14 new stores expected to be under construction or open.
Sprouts Farmers Market recently announced plans to open four new grocery stores in Dallas-Fort Worth. Kroger, which has been in North Texas for more than 65 years, said in a statement that it is investing millions of dollars in technology upgrades, energy-efficient coolers and freezers, new flooring and “thousands of new floor coverings” at existing DFW stores. He said he is investing. Local, healthy and nutritious options. ”
“As growth continues to be a hot topic in North Texas, Kroger is expanding to meet demand with three new marketplace-style stores in Melissa, Plano, and Fort Worth. and both are scheduled to open in 2024,” said John Votava, Director of Corporate Affairs.
Together, Central Market and HEB rank as DFW's seventh-largest grocery chain with a 3.62% market share in 2022, according to data from Chain Store Guide. The company's store count has increased 36% since then, which is the latest data available.
Chain Store Guide's 2022 data shows Walmart in first place with 27.68%, followed by Kroger (16.43%), Target (7.46%), Sam's Club (7.18%), Tom Thumb (7.1%), and Costco (6.08%). It continued.
HEB is known for its high-quality private label products and creative discounts, as well as its wide range of services from banking to beauty to pharmacy. Some stores have restaurants attached, and Melissa's stores have a pharmacy and True His Texas BBQ, each with a drive-thru.
“HEB's fans are almost a cult following,” Young said. “The grocery store will continue to dominate the market because people love, love, love the grocery store.”
Kroger is also starting to ramp up its in-store offerings, and “the more experiences consumers want, the more engaged our fans will be,” he said.
HEB is also testing ValuePrice's Joe V's Smart Shops chain in Dallas, with construction expected to begin in 2023 at two stores on Wheatland Road and Buckner Boulevard.
HEB continues to grow in Dallas area, creating thousands of jobs
In addition to providing consumers with more grocery and food options, HE-B's arrival in DFW spurred job growth. We currently employ approximately 3,000 people across our Metroplex locations.
Jackson said the grocer offers competitive pay, career growth opportunities and a “people-centered culture” that allows it to hire and retain employees.
HEB employs an average of 600 to 700 people per store, depending on store size. Approximately 600 people will work at the Melissa HEB store, which will produce food products such as tortillas and ready-to-eat meals on-site.
Mallory Vachon, chief economist at Labor IQ, a Dallas-based compensation benchmarking firm, said HE-B's wage and benefit policies are attractive to many job seekers.
Vachon added that the DFW area has seen significant workforce growth in recent years compared to other similar cities, attracting more talent pools to hire.
“Competitive compensation in addition to benefits is one of the key elements that all companies need to focus on, especially in high turnover sectors like retail,” she said.
HEB hasn't disclosed any future plans beyond the second store in Frisco and the new store in Prosper, but the chain is planning to open more stores in the DFW area. Jackson said in his email that the company is looking to expand into new and existing markets, including North Texas.
“As we think about the future of our business and position ourselves for success, we consider several determining factors, including market demand, significant population growth, and real estate availability,” she said. Stated.
