Charles Butt

chairman and CEO
Company: H.E. Butt Grocery Co.

Today, Butt chairs the privately held, San Antonio, TX-based H-E-B supermarket chain, with 320 stores, including 25 locations in Mexico, and $13 billion in sales. The third-generation grocer became H-E-B’s CEO in 1971, and has led the company’s evolution into a major regional retailer with significant vertical integration in food processing.

Described by a retail trade publication as “a benchmark for market domination,” H-E-B has gobbled up two-thirds of the local supermarket dollars in several Texas metro areas, “in the process offering some encouragement to grocers that have resigned themselves to living in Wal-Mart’s lengthening shadow.” Indeed, the company is today the nation’s 15th largest grocery chain based on revenue and the leading company of its kind in Texas. In 2006, H-E-B was number 11 on Forbes’ list of largest privately held companies and the largest privately held company in Texas. H-E-B is also known for its generosity, with 5 percent of annual pre-tax earnings given to civic and charitable organizations in the communities in which the company operates, including schools and food banks.

H-E-B manages to offer the customers varied store formats: from the H-E-B Plus stores of 140,000 square feet to its 75,000-square-foot specialty gourmet offering, H-E-B Central Market. Each is tailored to the demographics and ethnicities of its immediate neighborhoods, experts say.

As Butt himself told Wharton Alumni Magazine in 1997, “The most important place a retailer can be is in the store. That’s where you can speak with customers personally and learn about their changing needs.”

That fact stands out clearly in this down economy, as demographics shift, customer bases become more segmented and consumers alter their shopping patterns.

“We did a lot of format refining, which we think is important because of the increasingly bifurcated aspects of the American economy,” Butt, the chairman and chief executive officer of H.E. Butt Grocery Co., told SN.

“Income groups and lifestyle groups have become more distinctive in their taste differences. That requires continued tailoring of our upmarket stores, which includes using a lot of ideas from our Central Market format.”

In addition to taking ideas from one format to another, tweaking product assortment in its value stores has become a priority for H-E-B.

WYD Team