|H.E.B.'s Older Downtown Store|
As someone intimately familiar with retail business, profitability, etc., Brownsville's collection of H.E.B. stores appear extremely profitable in an industry noted for slender profit margins. In 2013 the 350 H.E.B. stores in Texas and northern Mexico reported total revenue in excess of $20 billion. Grocers in Dallas, Houston and San Antonio would kill to operate with only one legitimate competitor, Walmart, as H.E.B. does in Brownsville.
A serious problem for the local consumer, perhaps related to the lack of competition or simply no internal controls or monitoring, is Brownsville's H.E.B.'s time and again failing to make their featured meat items available at the advertised price. I understand the rationale for this practice as market managers are rated on their gross profit. Featured ad items, sometimes sold as so-called "loss leaders," eat into that gross. The store's market managers would actually prefer to not sell those items as they may feel their job security or promotion opportunity may be directly related to how much of a profit margin they show.
Allow me to share a few specific examples.
A couple years ago, the H.E.B. weekly ad contained a full front page advertising Hill Country Beef Fajita packages at a very attractive price. We stopped at the H.E.B. on Central Boulevard, quickly noticing NONE of this product was on display, despite it being a regularly stocked item. First consulting a clerk, then the market manager, finally involving the store manager, we learned that no product had been ordered to support the ad. When we asked for a "rain check," something offered by almost every grocery chain in the U.S., we were told that H.E.B. did not offer "rain checks." We could simply wait for the "next truck" delivering meat to the store.
This past Wednesday, I stopped at the H.E.B. on Paredes Line Road. At the top of my grocery list was sliced spiral ham, advertised at $1.47 lb. Noticing that all the spiral hams were marked either $2.99 or $3.47 lb., I asked a clerk to direct me to the advertised item. She asked me how many I needed and repriced one at the advertised price, leaving an entire display at twice the advertised price or more.
Last week, again at the Central Boulevard H.E.B., I asked the clerk to direct me to the advertised beef roasts. He asked how many I needed. I asked for 4 and told him that my son needed 2. He brought out exactly 6 roasts, which we loaded into the shopping cart, leaving his counter empty of the featured ad item.
These are not isolated instances. I've experienced these situations time and again at Brownsville's H.E.B. I enjoy shopping at the store, but it's obvious a consumer has to be pro-active to prevent themselves from being defrauded.
In many large metropolitan areas, retail ads are routinely checked for compliance. Store managers carefully check to make certain they can back up the ad. Not so with Brownsville H.E.B. After all, they have no real competition and little regard for the consumer or honest business practices.