Inside This Issue - Opinion
Elite group has 51 members
July 12th, 2010
by David Pinto, Editor
Contained in the previous issue of MMR was a roster, compiled by our editors, of the 50 most influential mass retailing executives. Actually, the list should have included 51 such personalities.
It was a particularly unfortunate omission, given the accomplishments of the 51st most influential executive. The missing person is none other than Charles Butt, leader of the H.E. Butt Grocery Co. (H.E.B.), arguably the most exciting, accomplished, complete, relevant and successful grocery retailer in America.
Butt is the grandson of company founder Florence Butt, who started the business in 1905 with $60, which she used to open a single 750-square-foot grocery store in Kerrville, Texas. But Charles Butt’s contributions to H.E.B’s astonishing success have dwarfed even the wildest dreams of his grandmother — or the accomplishments of his father, Howard E. Butt, who first envisioned the possibility that the grocery retailer started by his mother could become more than just, well, another grocery retailer.
Charles Butt, who was born in 1938 and began working in the stores when he was 8, succeeded his father as company president in 1971, at the age of 33. At that point in its history H.E.B. had annual sales of about $250 million. Today, as chairman and chief executive officer, Butt oversees a retailing juggernaut with annual revenues of more than $15 billion.
But H.E.B. is more than numbers. Much more. The supermarkets that the retailer operates more nearly anticipate, reflect and cater to the local clientele than any other grocery chain in the nation. Indeed, no rival even comes close. If West Des Moines, Iowa-based Hy-Vee has emerged as America’s leading grocery chain in terms of what it stands for, promises and intends to be, H.E.B. has long held that position in terms of what it is and what it delivers.
With Butt in charge, H.E.B. has adapted more faithfully to the changing demographic of the customer it serves than has any company in the annals of food retailing. To respond to an increasingly urban and diverse population, the retailer offers a one-stop-shopping superstore, a limited-assortment format and an upscale prototype that replaces traditional center-store grocery departments with a greater emphasis on such perimeter departments as produce, meat, seafood and bakery.
In the decade just ended, the retailer developed a hybrid store that marries many of the features of its upscale prototype with those of its traditional food/drug combination stores. In 2004 the company opened its first such store, a 110,000-square-foot H.E.B. Plus unit, in San Juan, Texas.
Most recently — on May 5 of this year — H.E.B. unveiled its newest concept, a 50,000-square-foot, scaled-back supermarket called Joe V’s Smart Shop. The store, located in Houston, is an attempt to attract the cash-strapped, economically stressed consumer with a lower-price value proposition. Joe V’s offers its customers a 9,000-SKU assortment (as opposed to some 37,000 SKUs in its more conventional grocery stores) that emphasizes meat, produce, baked goods and drug store items. One observer at the grand opening described the unit as “no frills, inside and out,” while another commented on its "warehouse-inspired" look.
The new unit is less remarkable for what it is than for what it stands for. Typical of Charles Butt’s legendary approach to grocery retailing, Joe V’s is but the most recent example of the company’s ongoing, and incredibly successful approach to retailing, one designed to both anticipate and respond to the needs and wants of the customer, often before the customer understands and appreciates the nature of those needs and wants. Perhaps more than any supermarket operator before him, Butt asks not where his customer is today but wants to know instead where that customer will be tomorrow. He then takes the critical, but often neglected, next step: He markets to that future.
This perspicacity, one that borders on clairvoyance, has landed Butt solidly on MMR’s list of most influential retailers. In terms of his impact on mass retailing in America — and, indeed, on the world of grocery retailing — Charles Butt has no equal.