Store Level Sustainability
Where no two stores are alike, “My H-E-B” is not just a slogan.
Continually adjusting to demographic shifts, H-E-B focuses on highly tailored product assortment and how each store is designed and merchandised. H-E-B frowns on a “peanut butter approach,” says James Harris, director of supplier diversity.
“There is a tendency over the years for large chains to put in stores that are really the same no matter where you go,” says Bill Reynolds, H-E-B’s group vice president of facility alliance. “There is a value there on economies of scale, but it does not really fit each and every neighborhood.
“At HEB, no two stores are the same; in fact you will see very different looking stores, from the physical presence to customized formatting and assortments depending upon the demographics. Merchants tailor the store so that everything is customer- and community-centric. I think we have a real strength there,” says Reynolds, adding, “I work with Hugh Topper and the team on layout… Produce is our calling card. We have it upfront to make a first impression, and it also has to have flexibility to adapt to seasonal and product changes and set the tone for the customers of that shop.”
Adds Hugh Topper, group vice president of fresh procurement and merchandising, “One of our mottos is, ‘We buy Texas first,’ so we work hard with large to mid-size to small growers to deliver. First and foremost is getting everyone aligned with our strategy on what we want to accomplish from a merchandising perspective.
While walking through two LEED-certified stores in San Antonio, it becomes obvious that partner input is an integral part of the sustainability movement. One clever merchandising idea epitomizes a multi-faceted solution that marries people, profits and planet. As a starting point, many produce displays use Returnable Plastic Containers (RPCs), notable in itself, as H-E-B was a pioneer of RPCs — one of the early adopters on a chain-wide basis when there was a lot of industry resistance.
These streamlined RPC display racks are resourcefully designed for rear loading, which increases efficiency, uses less space and keeps aisles clear for shoppers, explains Bobby Wojcik, produce manager at the LEED-certified, but traditional H-E-B store at Alon Market.
While walking through two LEED-certified stores in San Antonio, it becomes obvious that partner input is an integral part of the sustainability movement.
The merchandising concept goes one step further in looking out for the well being of H-E-B’s partners. Ease of loading lightens the workload and the back pain. “We’re also converting to banana box pods, so we don’t have to bale cardboard or spend money on a display fixture,” says Anna Chandler, region merchant of produce and floral. “Pods are flexible and easy to set up. The display looks like a farmer’s market, puts focus on the product and our customers like it,” she says, noting that the team is working on translating the concept to other produce items.
In addition, “We’re transitioning out of our wasteful paper signage in the produce department and the rest of the store, and converting to reusable, efficient signage that merchandisers can flip,” adds Mike Willis, general manager of the H-E-B Plus! LEED-certified store at Stone Ridge Market.
Another sustainability win is moving to concrete floors from linoleum, which are easier to clean with fewer chemicals, while being more durable, according to Chris Clutter, engineering design manager, design and construction.
“We’ve gone to a continuous dimming system on some of our more recent stores so that it is not as abrupt or noticeable to the customer,” says Reynolds. “We wanted to make it more transparent and something that is not a distraction.
“We must always remember that our partners and our product and the services around those are what we offer,” Reynolds emphasizes. Using less energy, for example, is a really good consumer cost model. “Customers need good prices, and the fact is, if we do not manage our cost well, we cannot support those demands.”
Behind The Scenes
That strategy pursues all aspects in the sustainability journey, with an unyielding push to cut out waste, reduce energy, alleviate inefficiencies and innovate both business savvy and environmentally friendly solutions.
“Being a supermarket, we use a lot of energy through refrigeration, high-intensity lighting and air conditioning required to keep the humidity out,” says Joe Lopez, H-E-B’s energy manager, who focuses on demand-side management in stores, distribution centers, manufacturing facilities and warehouses.
“We must always remember that our partners and our products and the services around those are what we offer. Customers need good prices, and the fact is, if we do not manage our cost well, we cannot support— Bill Reynolds, Group vice president of facility alliance
“H-E-B spends a lot of money on not just electricity, which is a big part of the pie at an overwhelming percentage of the store’s operating cost, but we still spend quite a bit on water and natural gas. So my job is to help reduce our energy consumption, which goes right to the company’s bottom line,” he says, adding, “Electricity is a huge expense; I think it is No. 3 behind labor and rent.”
Lighting retrofits, which Lopez calls the low-hanging fruit, reduced wattage 41 percent. “With over 200 lights on average per store, we saw a four to six percent reduction in our total electricity use, in addition to lowering maintenance and labor costs. But the benefits translate to the produce department as well, improving color rendition and visual appeal on the retail floor,” says Lopez. One added benefit of new lighting is that those higher wattage fixtures generated more heat, which was bad for produce.
Open cases in stores use a significant amount of energy to keep products cold. For stores that are not open 24 hours, night blinds keep the cool air in the cases for a two to six percent reduction on the meter, but also lead to less shrink, Lopez explains.
In the pipeline, H-E-B would like to install LED lighting in refrigerated cases throughout the store, says Lopez, noting, “We have tested some in produce cases here in town.” One advantage of LED is lower energy, but the really big advantage is much lower maintenance. However, there are challenges in cold climates in keeping their full brightness. H-E-B is also testing innovative air-conditioning technology that reuses existing water condensation.
Water is a big issue, albeit still relatively cheap when prioritizing initiatives, says Lopez, noting challenges in the hot Texas weather. Many variables impact alternative energy results, he explains, noting that experiments with solar power still only amount to one percent of H-E-B’s total annual consumption, and wind energy purchases requiring a bigger upfront investment are a hedge. “We are hoping that over the life of the purchase, there is a kind of breakeven point,” he says.
“We are very open to trying new things,” says Reynolds. “With research and development, some things work, some things do not, but there is a willingness to explore what makes sense.”
From the partners on the front lines to the partners at headquarters, everyone at H-E-B seems in sync with this strategy.