Texas supermarket chain H-E-B planning to open, remodel nearly a dozen stores in its hometown of San Antonio over next several months, debut 22 new stores, major renovations throughout Texas market, citing growing population, increased competition

Cindy Allen

SAN ANTONIO , April 21, 2014 (San Antonio Express-News) – This week H-E-B will unveil its first new store in San Antonio in two years, and the chain plans to open or remodel nearly a dozen more in its hometown over the next several months.

Many of the upgrades, which include drive-through pharmacy lanes and full-service bakeries, bring some of the grocery industry's now-standard amenities to H-E-B's older stores. But the company also will push forward its own recent innovations, with restaurants and in-store candy shops opening at San Antonio locations soon.

The dramatic growth extends beyond the Alamo City. The grocer is preparing to debut 22 new stores and major renovations throughout its Texas market.

With competitors such as Aldi, Trader Joe's and Walmart expanding across the Lone Star State, the evolving retail landscape has put pressure on H-E-B to refresh its image.

"While the population in Texas continues to grow, the square footage of retail is growing faster than population growth," H-E-B spokeswoman Dya Campos said, "and there is no doubt that the retail growth creates a very competitive environment.

"H-E-B is a very aggressive and dynamic retailer," she added. "We are continuously changing, innovating and creating new store designs and concepts."

In San Antonio, H-E-B on Friday will welcome customers to a new 91,000-square-foot store at 368 Valley Hi Drive, off Loop 410 and next door to an existing H-E-B that it will close and lease out soon.

It will be the first store opening here since H-E-B launched its largest-ever location at Loop 1604 and Bandera Road in 2012.

The replacement store, about 2 1/2 times the size of the 400 Valley Hi Drive location, will feature expanded produce, deli and meat markets as well as fresh sushi, flame-grilled chicken and handmade sandwich stations that H-E-B developed in-house.

Campos said the company hired about 150 employees for the new Valley Hi store and will add more than 500 new jobs to its Texas market.

Through December, H-E-B will complete 11 new stores and upgrades in the San Antonio area, including Leon Springs, Pleasanton and Schertz.

"Some of these communities have really outgrown their stores," Campos said.

In Schertz, H-E-B already started construction to expand its store at Interstate 35 and FM 3009 to a 144,000-square-foot H-E-B Plus with more general merchandise, beauty, clothing and entertainment sections.

The upgraded Schertz store also will house a full-service restaurant and bar with more than a dozen Texas craft beers on draft. The menu already includes street tacos, Campos said, as well as a "Dole Whip" float.

The company borrowed the idea for the soft-serve pineapple-flavored frozen dessert from Disneyland, H-E-B spokeswoman Kimberly Harle said.

All of the store's construction materials, she added, will be Texas-sourced.

An upscale H-E-B planned for the Stone Oak neighborhood, at the corner of Hardy Oak and Wilderness Oak, also will include a full-service restaurant, called Oaks Crossing. The store and restaurant will open this June.

H-E-B's laundry list of renovations didn't surprise David Nicolson, president of the local Weitzman Group real-estate firm.

Considering the entry and expansion of other grocery chains, "it's important for H-E-B to make sure that their existing offering is top-notch and (it's) more important than ever to just stay on top of that," he said.

However, Nicolson also expected to hear news in the future of brand-new stores that H-E-B will bring to the San Antonio market.

H-E-B currently sits on several unused lots in the area, including space at Bulverde Road and Loop 1604, Alamo Ranch Parkway and Alamo Parkway, and Culebra Road and Texas 211.

However, Campos said: "It is premature to speculate on what might happen in terms of store growth beyond this year.

"Those sites are owned by H-E-B," she added, "and we do not have a set time frame for groundbreaking on those sites at this time."

As for the remodels, Nicolson said they should help reinvigorate the surrounding retail hubs and shopping centers.

"If the (grocery) store starts to get tired, that is not compelling to the retailer who is studying that intersection and considering opening a business there," he said. "When they can see H-E-B's spending millions of dollars remodeling and expanding that store because it's such a good area, they want to be there."

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