H-E-B to evaluate area sites for Central Market expansion

Fort Worth-area foodies wanting to shop at an H-E-B grocery store may have to wait a little longer.

Although the San Antonio-based chain announced Monday it has purchased six properties in North Texas from Sun Fresh Markets, including a former Tom Thumb store in Grapevine, the company said it is “evaluating the feasibility of each site” for its Central Market brand and not its flagship H-E-B chain.

“We will be evaluating these properties for our Central Market format at this time,” H-E-B spokeswoman Leslie Sweet said in an email on Tuesday.

The privately held H-E-B has been acquiring property in the Metroplex for several years, increasing speculation that the popular South and Central Texas grocery chain was ready to enter the region’s competitive supermarket business.

It has announced plans for an H-E-B in Mansfield and purchased land in north Fort Worth at the southeast corner of U.S. 287 and Bond Ranch Road and in Euless’ Glade Parks development, which is close to the Grapevine site.

Since the Sun Fresh deal is only for a few properties, H-E-B may plan to test different formats in the Metroplex instead of expanding its H-E-B flag, said Ed Fox, a marketing professor at Southern Methodist University’s Cox School of Business.

“If they are going to come to DFW, they aren’t going to come in with three or four stores,” Fox said. “They will open twenty stores and have a major distribution center.”

Central Market, which opened in Fort Worth 15 years ago, has been very successful in North Texas, Fox said. A few years ago, H-E-B opened a smaller Central Market store near SMU that executives are considering for other urban neighborhoods.

One reason why H-E-B has not expanded into the Metroplex may be because it does not have a distribution center nearby, said Zachary Hall, a professor at TCU. Typically, a grocery store chain will service stores within a 300-mile radius of its warehouse, Hall said.

“They’ve just been more conservative in their growth because distribution centers have limited them and that is a huge capital investment,” Hall said. H-E-B has distribution centers in Houston, San Antonio, San Marcos and Temple.

Sun Fresh Markets, based in Carrollton, is closing the six stores, which were acquired in late 2014 from Albertsons and Safeway, Tom Thumb’s parent, before they merged. In addition to the store at Texas 121 and Hall Johnson Road, four are in Dallas and one is in McKinney.

H-E-B operates stores in Burleson, Waxahachie, Ennis, Granbury, Corsicana and Cleburne. It operates Central Markets in Fort Worth, Southlake, Dallas and Plano.

When H-E-B eventually expands to the Metroplex, Hall said, consumers will benefit from the chain’s offering of good products at low prices.

“They are one of the few organiations that can give you the variety with the same pricing as Wal-Mart,” Hall said. “But they have a level of service that is significantly higher than Wal-Mart.”

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This story was originally published August 16, 2016 at 5:57 PM with the headline "H-E-B to evaluate area sites for Central Market expansion."