H-E-B: A lesson in the grocery business
Florence Thornton Butt moved to Kerrville from Memphis in 1904 with a sick husband and three small sons. On Nov. 26, 1905, she opened a small grocery store below her family’s modest apartment at 812 Main Street in Kerrville.
Florence spent $60 on inventory — money she borrowed from relatives in Tennessee. The business grossed $50.60 in its first month.
Originally advertised as Mrs. F.T. Butt Grocery, Florence changed the name to C.C. Butt Grocery after her husband, Charles. In early 20th Century America, a business named for a man was more socially acceptable.
The business grew, slow and steady, especially after Florence began offering free delivery. The delivery vehicle was 10-year-old son Howard’s wagon. Courtesy and fair dealing were the cornerstones of the business.
On Dec. 26, 1911, Florence moved her store from its Main Street location to the ground floor of the Masonic building on Earl Garrett Street in Kerrville.
Youngest son Howard clerked at the store until he graduated from Tivy High School in 1914. After serving in the Navy in World War I, Howard returned to Kerrville and assumed active management of the family business.
The C.C. Butt Grocery Company didn’t succeed by standing still or playing it safe. Howard tried new things. Some worked, some didn’t.
In 1920, the company opened its first branch store in Center Point and a feed and seed store in Kerrville. Both failed.
In 1922, Howard changed the business model from a credit based system to a cash-and-carry system. Instead of charging, customers settled the invoice in cash at the time of purchase.
In 1925, the Butt family bought the Kerrville Piggly Wiggly grocery store at 233 Earl Garrett Street, combined the businesses and began operating as C.C. Butt Piggly Wiggly. The world was about to get a lesson in the grocery business.
In the old days of grocery shopping, a shopper handed her grocery list to the store clerk who gathered the items for her.
Then in the early 20th Century, Clarence Saunders of Memphis, Tennessee had a crazy new idea — a self-service grocery store. Each item was marked with a price. Shoppers did their own shopping from open shelves using a new contraption — a shopping cart.
In 1916, Saunders founded a chain of Piggly Wiggly grocery stores using the modern self-service business model. The Piggly Wiggly system revolutionized the grocery business.
Howard Butt saw the future of grocery shopping at Piggly Wiggly. He wanted to build a chain of grocery stores using the open shelf, self-service concept.
The new business model propelled the Kerrville store to record profits. Howard plowed the profits back into the business.
The company grew rapidly. In four years, the C.C. Butt Piggly Wiggly Company opened branches in Junction, Brady, Brownwood, Gonzales and Del Rio.
Responding to demand in an area of Texas long neglected, the company moved heavily into the lower Rio Grande Valley. In 1929, Howard moved the company headquarters from Kerrville to Harlingen.
In 1935, Howard changed the name of the parent organization from the C.C. Butt Grocery Company to the Howard E. Butt Company. In 1946, he shortened the name to H-E-B.
In 1930, the company operated 17 stores with $2 million in annual sales. By 1936, the company had 31 stores and by 1940, 38 stores. The newest stores had air-conditioning.
The relationship between the Butt family and Piggly Wiggly was only a franchise arrangement. The Butt family owned and operated the stores. In 1944, the company dropped the Piggly Wiggly name and began operating as H-E-B Food Stores.
The company moved its headquarters from Harlingen to Corpus Christi in 1940. In 1985, headquarters moved again into the historic San Antonio Arsenal that once furnished arms and munitions to frontier Texas forts.
Today, Charles E. Butt, son of Howard Butt and grandson of Florence Butt, runs the company. H-E-B operates over 300 stores in Texas and 52 stores in Mexico. It is one of the largest family-owned retail food chains in the world.