Selling Supermarket Service and Selection

The typical notion of beer and wine in a supermarket setting is one of huge case stackings of Budweiser, Coors Light or mass market white zin, but you won’t find any of those at Central Market in Dallas. But then again, Central Market is far from your average supermarket.

The seven-unit chain began in Austin in 1994 and moved into the north Texas market with the opening of a store in Fort Worth. The Dallas store opened in 2002. (There is also a unit nearby in Plano.) It’s a new approach to the supermarket business by HEB, a more than 100-year-old family-owned company with stores throughout Texas and Mexico. (see “The 100 Year Parent” sidebar)

George Howald, manager of the beverage alcohol department at Central Market in Dallas, has more than 20 years experience as wine director at several top Dallas restaurants. PHOTOGRAPHY BY TOM HUSSEY

“The situation here was such that Dallas had sort of been lulled to sleep with traditional grocery stores,” explained wine and beer department manager George Howald, who joined the company a few months before the opening of the Dallas unit. “The door was really open for Central Market to come in and reawaken people to what fresh food and outstanding selection and great service could be.”

Indeed, selection throughout the stores various departments is outstanding. For example, Central Market claims over 60 different recipes for its signature sausages (with about 30 available on any given day) and 20 different fresh-squeezed juices offered every day. A similar range of choice is offered in the wine and beer department. The business plan for each Central Market location calls for sales of approximately $1 million a week with about 10% of that coming from wine and beer. In his location, Howald says beer accounts for about $15,000 worth of the department’s $100,000 in weekly sales.

“The store is situated close to an affluent residential district from which we draw, but really it’s not uncommon to have people drive from hours away,” Howald explained. “They’ll make a monthly trip to Central Market to get things that they couldn’t possibly get where they live. So really, the store is in a tremendous location and draws from a wide area. For the everyday shopper, the average total grocery basket is in the $50-plus range.”

In addition to the beverage alcohol department, Howald noted that wine is also merchandised to some degree in the cheese department, and both wine and cheese are sometimes displayed in the produce department. “It’s really a nice situation,” he said. “Texas has some really crazy liquor laws and we can sell beer and wine up to 17% alcohol. So we don’t have any port. But because of the type of license we have, we can sell beer and wine seven days a week and, because we sell wine by the glass, someone could actually buy a glass of wine and drink it while they shop. That’s a nice feature.”

It’s certainly not a feature that most shoppers experience when they usually go grocery shopping. Howald said his department offers a half dozen wines, served in a real wine glass for about $3.50 each. The customers drop off the empty glasses on their way out.

The Right Man For The Job

Unlike many of his counterparts in traditional supermarket chains, George Howald does not have an extensive background in the grocery business except as a shopper. Instead, the Dallas native brings more than 20 years experience in the restaurant business. His résumé includes stints as wine director at The Mansion on Turtle Creek, the world famous restaurant and five-star hotel, and general manager of City Café, also in Dallas. “That’s an interesting part of the Central Market concept,” Howald said of his own hiring. “They look for a broad range of different experiences to sort of grow the employee knowledge base.”

In addition to his accumulated on-the-job knowledge of wine and beer, Howald also brings a personal love of the subject. “The wine business is so exciting because it encompasses so much — geography, history, chemistry — and most of the people who are winery owners, producers, winemakers all have an enjoyment for life and the good things in life,” he noted enthusiastically. “And I like those things too.”

He’s the type of person who plans vacations around wine regions that are also attractive destinations. And as someone who loves to cook (and eat) he describes himself as an individual who would likely be a regular shopper at Central Market.

Howald is also a member of the Society of Wine Educators and loves that in his current position he gets to help educate both staff and the wine-drinking public. “Just from a wine education standpoint I love being involved with the customers. A really good wine list might have 300 entries and a lot of those are going to be predominantly names that everyone will know, restaurant-oriented wines. Whereas with our wines from all over the world, you just have a much bigger bag to pull from to make that exciting experience for them.”

Not Supermarket Wine

Central Market in Dallas is a supermarket without much in the way of supermarket wine. Patrons can choose from a selection of 2,500 wines from all the usual wine regions, but also from Greece, Lebanon, Switzerland, Luxembourg and even Georgia for a local contingent of Russian émigrés. To stress the difference between his store and the typical grocery store offerings, Howald noted Dallas Central Market’s 100 dessert wines, which include a vin doux naturel from Rivesaltes, a Canadian ice wine and a chocolate cherry wine from Denmark; a choice of 48 sakes ranging in price from $3.49 to $67.49; and 30 Kosher selections ranging from the traditional sweet wines up to Napa’s Covenant Cabernet Sauvignon at $95 a bottle. Then there’s also the strong selection of Italian Pinot Grigio and Chianti, Dry Muscadelle and Viognier/Marsanne wines from Australia as well as first growth Bordeaux and other prestige wines.

Prices at the store run the gamut from $4 to $2,000 a bottle, although according to Howald the average wine sale is in the $12 to $14 range. As with any retail operation, price is always a factor, but it’s not really what the Central Market concept is about. “We’re certainly conscious of other retailers’ pricing. We’re prepared to price-match those items that may have a certain profile with customers and that may make a significant difference if we were priced higher on those items,” Howald said. “Overall, being the low price leader in that category is not our focus. We’re fair in our pricing, competitive in our pricing, but we’re not necessarily the least expensive place to shop in Dallas.”

Of course, with the range of choices available, Central Market needs to have a wine staff that knows the products and can make appropriate pairing suggestions. For Howald, who will typically have four sales staff on the floor on a weekend afternoon, employee education is part of an ongoing process. “When I’m looking at bringing someone in, it’s not always necessary that they have a background in beer and wine specifically, but they need to have a strong desire to learn,” explained Howald.

Tools that he uses include materials from wine wholesalers, websites and electronic newsletters that he passes on to staff, and tastings hosted by vendors. Howald also uses material from the Society of Wine Educators both to help structure study and for testing materials to assess employee proficiency about different wines and regions.

Howald likes to think of his department as akin to a fine wine shop, but unlike many fine wine retailers who have staff who specialize in particular categories like Italian reds or Bordeaux or high-end California Cabs, he wants his staff to be generalists so that they can help any customer find an appropriate wine to pair with whatever meal they are planning.

“The way the store is laid out lends itself to someone navigating through it in a certain pattern,” Howald explained. “You generally enter the store through the produce department and make your way into the meat and seafood aisles and that leads you right into the beer and wine department. It’s a great situation in that someone presumably has picked out what they’ll have for dinner and now they need to make a wine selection to go along with it. We can look in their basket and talk to them about what they have and what would pair well.

In keeping with its unique identity, Central Market sells 325 different beers, on shelves and in cold boxes, but carries none of the top national mainstream brands, such as Bud Light, Budweiser, Coors Light and Miller Lite.

“I really enjoy a good wine pairing,” Howald said of his own wine preferences. “It’s really a matter of finding the right style of wine for the occasion or for the type of food that’s being prepared. That’s something that really drove me to being involved with the Central Market concept. A lot of times in a restaurant situation you get people wanting to buy a label to impress their friends, rather than a wine that really goes with the meal.”

Like any wine lover, however, Howald can also be easily seduced. “Do I hunt down hard-to-get, allocated wines? Do I want to have the prestige names on the shelf? Sure,” he admitted. “I’m not immune to that. Do we have a percentage of our clientele who are collectors who want to pick up those wines? Of course. But, really that’s not the main focus of what we do.”

Wine Opportunities

In addition to the merchandising opportunities in his own and other departments within the store, Howald also has other opportunities to spread the word about wine. All of the Central Market locations offer cooking classes and wine is very obviously a part of that experience. “We will have guest lecturers, master sommeliers, masters of wine come through, or I will teach the wine classes,” Howald said. “And I do put together some wine events that have really worked out well for us where we’ll have a principal from a winery come in and lead a tasting.”

An event that took place in mid-October featured Denis Horgan, owner of Australia’s Leeuwin Estate. For a cost of $35, Central Market customers attended a reception on the store’s upstairs patio with an “Aussie inspired buffet” prepared by the store’s catering department. The second half of the program was an indoor structured tasting featuring five of Horgan’s wines conducted in a classroom setting. According to Howald, about 50 people can usually be accommodated for such an event.

Beer Here

There are probably very few outlets licensed to sell beer in the U.S. that don’t carry Bud, Bud Light, Coors Light and Miller Lite. Central Market is one of them, although they do carry Michelob Ultra, a concession to health-conscious shoppers. “Given the amount of space we have and what we’re trying to accomplish with the store, we don’t have the mainstream labels,” explained Howald. “It’s not really the point of Central Market to carry all the brands that everyone else is carrying. We want to have a unique product mix.”

Although Central Market may not carry the biggest names in domestic beer, that’s not to say they don’t have a selection. According to Howald, his department stocks some 325 beers, both on the shelf and in the cold box, and says that his biggest sellers tend to be whatever is being displayed on the floor or featured in the store’s weekly flier. “Being that we’re in Texas, Shiner is a huge seller and Corona is still big,” he said. Other consistently popular beers include Fat Tire, Sierra Nevada Pale Ale, Blue Moon, Pyramid Apricot Ale, Abita Turbo Dog. On the international front, Howald’s customers show a bias toward Belgium with Stella Artois, Lindeman’s Lambics and Hoegaarden among the big sellers. He also stocks all of the major import brands such as Heineken and Foster’s as well as an outstanding selection of Mexican beers.

The variety of beers is one of the things that Howald likes about working in a retail environment. “In a restaurant you don’t really focus on seasonal selections,” he pointed out. “It’s fun to see all the seasonal beers and the Christmas ales that come through.”

A Change Of Pace

For someone who spent much of his previous career working for independent restaurants, moving into a corporate environment was bound to require somewhat of a shifting of gears. But in a lot of ways, Howald said he has a great deal of autonomy. “Being part of a big company, there obviously needs to be a certain level of control,” Howald admitted. “But the sets in the stores do really vary quite a bit.” Before any item can be received, it has to be put into the company’s system, but beyond that each manager has to decide how to allocate his space. “For any company of any size and scale, that’s always going to be a challenge and an issue. How much autonomy you give to an individual manager and how much uniformity you want throughout all of your stores. That’s something I’m sure everyone struggles with that has multiple locations. I think it’s important that you have a manager in place who’s listening to customers, that’s paying attention to what’s suitable for your demographic.”

Of course, paying attention to what’s suitable for its demographic has been the secret of Central Market’s success so far.

The 100 Year Parent

The Central Market concept kicked off in 1994 with the opening of a store featuring a European bakery, a deli with meats and cheeses from around the globe, and a juice and ice cream bar in Austin, TX. The chain’s history really began 89 years earlier, however, when Charles C. and Florence Butt moved from Memphis, TN, with their three sons and opened a small grocery store in Kerrville, TX.

In 1919, after returning from service in World War I, the couple’s youngest son, Howard E. Butt, got involved with the business. Five years later, he opened a second store in Junction, about 60 miles west of the original store. The Butt Grocery Company later became the H.E. Butt Grocery Company. Today, with Howard E.’s son Charles as chairman and CEO, H-E-B has more than 300 stores in Texas and Mexico and 56,000 employees. With sales of more than $11 billion annually, it has been ranked as the tenth largest family-owned
corporation in America.

A history of the company’s evolution is summarized below:

• 1940s – H-E-B opened its first air-conditioned stores and began stocking frozen foods.
• 1950s – The grocery stores become supermarkets, with a fish market, butcher shop, pharmacy and bakery under one roof.
• 1970s – The H-E-B Milk Plant opens in San Antonio and is now the largest milk plant in Texas. It also operates the state’s largest bread bakery.
• 1990s – Introduction of a new H-E-B Brand, under the concept of “Own Brands.” Already, over 3,000 H-E-B Own Brand products have been launched, ranging from eggs and yogurt to bacon and charcoal. Also Central Market opens in Austin and the company expands across the border into Mexico.
• 2000s – H-E-B ranks 10th in the nation among privately held companies based on $11 billion in annual sales, according to Forbes. New “H-E-B Plus” concept unveiled with 109,000 sq. ft. store in San Juan, TX, with expanded product and service offerings including extensive music, video and DVD selections; a larger baby department; dedicated space for grills and grilling supplies; an expanded card and party product section; lawn and garden equipment; electronic and household items and designated space for “surprise buys.” Houston Bakery, a 114,000-square-foot, fully automated facility to provide fresh bread at an average rate of 153 loaves of bread and 750 buns per minute.
• 2005 – H-E-B celebrates 100 years of serving Texans.