Discount Format Food & Grocery Retailing
A mere two weeks after opening its first Joe V's Smart Shop discount grocery store in Houston, Texas on May 5, San Antonio, Texas-based grocery chain H-E-B this week is giving the new store's product assortment a bit of a tweaking, Fresh & Easy Buzz has learned.
The product assortment adjustment started on Wednesday (May 19), and is based on feedback and other inputs the grocer has gleaned over the two weeks Joe V's has been open, according to Joe Villarreal, the general manager of H-E-B's Joe V's Smart Shop division.
We aren't surprised family-owned H-E-B would be doing a product assortment adjustment only two weeks after the discount format grocery store opened. H-E-B is among the most fastidious and best retail grocery merchandisers in the U.S. It's a good - and smart - sign at the smart shop.
Additionally, since Joe V's Smart Shop is a new format for H-E-B, and it's first price-focused discount grocery format to boot, it makes good and logical sense in our analysis for the grocer to tweak the store's product assortment so early in the game, and continue doing so regularly.
Since Joe V's is a limited assortment discount format - the store carries about 9,000 SKUs -regular product assortment adjustment is even more important for H-E-B, or for any other grocery chain that operates a limited assortment format, because with a limited assortment a retailer has to obtain the maximum sales bang from far fewer SKUs than a typical supermarket carries. For example, the average U.S. supermarket, which averages 46,755 square-feet, carries 46,852 SKUs, according to the Food Marketing Insitute's research. FMI is the leading trade organization for the U.S. food and grocery retailing industry.
That H-E-B, which was founded 105-years ago and does $15 billion in annual sales in about 300 stores in Texas and Mexico, is adjusting the Joe's V's Smart Shop product assortment so early is a sign the grocer understands the importance of item optimization when it comes to operating a limited assortment discount grocery format.
Fresh & Easy Buzz has heard from a few readers who've visited the Joe V's Smart Shop store in Houston in the two weeks it's been open. All of the readers told us the store was extremely busy during their visits.
Big reusable grocery bag giveaway at Joe V's
H-E-B is also taking an aggressive approach with Joe V's. Smart Shop in the area of reusable shopping bags.
During the store's first eight opening weeks, which started on May 5, the grocer is giving each shopper who makes a single item qualifying purchase four free reusable grocery bags, according to general manager Joe Villarreal. (Here's an example of a qualifying item.) The purpose of this aggressive approach is to equip as many customers as possible with reusable bags at no charge, so they can bring the bags with them to the store on return trips, thereby dramatically reducing the amount of single-use plastic carrier bags Joe V's uses on an ongoing basis.
H-E-B's Joe V's smart shop division initially considered not offering single-use plastic carrier bags at the store at all, according to Joe Villarreal. However, it later decided to offer them, but to give out the reusable bags for free as a way to encourage regular use of the bags by customers.
The free reusable bag promotion also fits into what is a key promotional feature at H-E-B's Joe V's Smart Shop, which is what the grocer calls its FREEBIE! And the tagline is: "There's always something free at Joe V's."
And yes, Jose Villarreal, or Joe which he uses in e-mail correspondence, is the person and name, at least inspirationally, behind the Joe V's Smart Shop format and store name, although neither H-E-B or Mr. Villarreal has stated Joe V's Smart Shop is directly named after its general manager, Joe Villarreal.
Related stories from Fresh & Easy Buzz:
May 5, 2010: H-E-B Opens Joe V's Smart Shop Discount Prototype Grocery Store in Houston TX ... But Where's Joe?
May 6, 2010: Say it Ain't So Joe: Trader Joe's Tells H-E-B's Joe V's Smart Shop to Change its Name