|Hundreds of shoppers turned out at the new HEB Plus store on Valley Mills in Waco, on Aug. 22, 2013|
Wednesday, August 17, 2016
Here comes H-E-B: San Antonio-based grocer buys six D-FW sites
San Antonio-based H-E-B/Central Market just made another big leap into the Dallas-Fort Worth market with the purchase of six Sun Fresh Market stores.
The state's largest independent grocery chain has purchased four Dallas stores in Uptown, Lake Highlands, Lakewood and Northwest Dallas.
Two more stores are in McKinney and Grapevine. Sun Fresh is in the process of closing these stores.
The stores have only been operated as Sun Fresh Markets for about a year. The transaction will be completed in a few weeks, said H-E-B/Central Market spokeswoman Mabrie Jackson. "We're thrilled to have these properties."
The four Dallas stores are former Albertsons stores. The McKinney and Grapevine stores were Tom Thumb locations. These six stores are among a batch of stores that Albertsons was forced to sell as part of an antitrust review of its 2015 acquisition of Tom Thumb's parent company Safeway.
H-E-B isn't sure yet how it plans to use the stores.
"At this time, Central Market continues to be the primary format for the Dallas-Fort Worth," said Todd Piland, H-E-B executive vice president of real estate. "We are currently evaluating the feasibility of each site to determine the most effective use of the properties."
But still there will be speculation about whether any stores might become H-E-B or Central Market. It could take several months for these stores to reopen.
The stores are located at:
-- McKinney - Hardin Boulevard and El Dorado Parkway
-- Grapevine - State Highway 121 and Hall Johnson Road
-- Dallas - McKinney Avenue and Lemmon Avenue
-- Dallas - Northwest Highway and Midway Road
-- Dallas - Northwest Highway and Ferndale Road
-- Dallas - Mockingbird Lane and Abrams Road
H-E-B has been buying up land in recent years, but these are the first buildings the retailer has purchased with one exception. A few years ago, Central Market, bought the former Borders Bookstore at the southeast corner of Preston Road and Royal Lane in Preston Hollow and converted it.
H-E-B owns about 20 parcels of land in the North Texas region, including in Allen, Carrollton, Corinth, Dallas, DeSoto, Fort Worth, Frisco, Grand Prairie, Mansfield, McKinney, Murphy and Plano.
This acquisition puts H-E-B into more established Dallas neighborhoods in addition to the two fast growing suburbs of McKinney and Grapevine. It operates two Central Market stores in Dallas and one each in Plano, Southlake and Fort Worth. The H-E-B stores are south of Dallas and Fort Worth in Burleson, Cleburne, Corsicana, Granbury, Ennis and Waxahachie.
"We are evaluating the feasibility of each property acquired in this real estate transaction as part of our long term real estate investment portfolio," Jackson said.
But a move into Dallas with its traditional grocery store is something that competitors have expected for a longtime. Today, H-E-B, which dominates in the state with Wal-Mart, only has a 1.9 percent market share in the Dallas area.
Last year, H-E-B reached the top of the Houston market and this year it widened that lead to a 23.5 percent share. It grew larger than former leaders there, Kroger and Wal-Mart. H-E-B has taken a different approach to the Dallas market. It first opened in Houston in the 1990s with small 20,000-square-foot Pantry stores. In the 2000s, it started building its larger H-E-B stores there.
Ray Schalek, of RLS Supermarkets of Carrollton, approached H-E-B about selling the six stores. In June, RLS sold 11 stores to Houston-based Fiesta Mart. Those stores are in the process of being converted to Fiesta Mart.
RLS will still operate the Sun Fresh store at 7007 Arapaho Road in Far North Dallas and two Cash Saver stores in southern Dallas at at 2130 East Ledbetter and 1201 W. Camp Wisdom, Schalek said.
The longtime San Angelo grocer, moved into the Dallas market in 2011 with the purchase of what was left of the Minyard Food Store chain from a Fort Worth investment firm. He declined to comment on his decision to give up on the Dallas-Fort Worth market at least with the former Minyard, Albertsons and Tom Thumb stores that he converted into Sun Fresh Markets in 2015.
Dallas-Fort Worth is one of the most competitive markets in the U.S. Not having a big corporate organization behind him likely made it harder to operate here.
Written by Maria Halkias/Dallas Morning News