H-E-B's response to Covid-19 & its competition analysis

1. H-E-B
"No Store Does More"
LAMDA-5
Adeola, Brad, Ben, Cullen, Sthitaprajna

2. About H-E-B
• 8 Values: Service, Heart, Drive, Innovation, Commitment, Community, Diversity, Sustainability
• 3 Pillars: Head for Business, Heart for People, Passion for Results
• Vision Statement: H-E-B Partners stand together to build the greatest retailing company.
• Mission Statement: Maintain sustainable strategies and bolster the lives of customers, employees,
suppliers, and the community. To "make each and every person count".
• Business Model: H-E-B seeks to secure recurring business by offering a wide variety of products (local
and national brands), rewards programs, and excellent customer service.
• Profit Formula: H-E-B nets $1 in profits for every $100 in gross sales, so product turnover is the key!
Achieved by carrying the right items on shelves and an elite distribution system.
• Value Proposition: H-E-B offers a variety of quality grocery and household products at affordable prices
while providing excellent service to retail customers.
• TLDR: H-E-B gains market share by exceeding expectations of what it means to be a grocer.

3. COVID-19's Impact
on Operations
• Increased demand on a range of items,
from toilet paper to canned goods left
shelves empty.
• Shortened hours of operation to provide
more time to receive shipments, disinfect
and restock shelves.
• Social distancing measures such as
maintaining 6 feet of distance between
persons alters management of foot
traffic.
• Since most retail employees cannot work
from home, tasked with
keeping employees safe and satisfied.
• Another challenge is keeping stores
sufficiently staffed in order to handle
longer lines.

4. H-E-B's Response To Covid-19
Proactive
communication with
overseas suppliers
COVID Action-
managers in stores
to ensure sanitation
& social distancing
Increased hiring for
the warehouse and
curbside pickup
Extra $2 Texas
Proud pay for all
frontline employees
Increased delivery of
products to as much
as 1600 trailers daily
Home delivery for
senior shoppers via
app
Protection with
Plexiglass partitions
at check-outs
Metered entry
into stores and
crowd control
guidelines
Sanitizing of store
surface areas all day
long and floor decals
at check-out

5. Competitor Analysis-
Amazon
• 13% increase to Labor force
• Increase hourly wages $2 an hour
• 47 million dollars donated for COVID-19
relief and research globally
• Prioritize delivery algorithms for medical,
household staples and groceries items
• Offer high-performing computing for
advanced research of diagnosis, treatment
and vaccine studies.

6. Kroger's Response To Covid-19
A comparison
• Updated store hours – special time slots for
the elderly
• Ramped up delivery operations – up to 5
times delivery in a week per customer
• Suspended product returns
• Hero bonus – $2 hourly to frontline workers
• Limited number of people in the store to 50%
of capacity
• Associate wellness checks
• Protective masks and gloves for associates

7. Walmart's Response To Covid-19
A comparison
Enlisting robots to scrub floors, scan shelves
and deliver groceries during the pandemic.
Have committed $8 million to Feeding
America to serve people facing hunger.
Announced $550M in associate bonuses
Plans to hire 150,000 new associates
In store – One-way movement through the
aisles. 6 feet minimum distance

8. Long-Term
Effects of
Covid-19
Increased focus on convenience - delivery
and curbside pick-up
Partnerships with local restaurants / food
chains
Health and safety policies between H-E-B
employees and employees of partners
Sense of trust and reliability from the Texas
community
Leveraging partner supply chains to diversify
and expedite delivered goods

9. Q&A

10. Appendix
1. https://www.khou.com/article/news/health/coronavirus/walmart-target-costco-heb-among-houston-area-stores-making-changes-to-
help-stop-the-spread-of-covid-19/285-fd0fafc6-95bd-4375-bd90-a88986629a88
2. https://www.khou.com/article/news/health/coronavirus/h-e-b-strongly-encourages-employees-to-wear-gloves-and-masks-due-to-
coronavirus-outbreak/273-19e62ed4-eafc-4f41-b2c3-7db2ee524b00
3. https://www.click2houston.com/food/2020/03/21/6-things-h-e-bs-scott-mcclelland-wants-you-to-know-about-products-cleanliness-
standards-and-more/
4. https://spectrumlocalnews.com/tx/san-antonio/news/2020/03/20/h-e-b-increases-pay--offers-senior-delivery-service