Despite Massive Net Worth, HEB Grocery Isn't Publicly Traded

Investors wish they could get in on HEB Grocery, but for now, it's reserved for employees and private investors. Does the company plan to go public?

Rachel Curry - Author

Jan. 26 2021, Published 12:34 p.m. ET

Back in 1905 in Kerrville, Tex., a woman named Florence Butt founded HEB Grocery. At the time, it was practically inconceivable to see a female-owned company in the South, especially one with enterprise potential. Currently, HEB is still a private company, but its net worth makes retail investors lick their lips.

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HEB reserves its company shares for employees as well as private and institutional investors. Meanwhile, the Butt family empire continues to grow.

HEB Grocery reserves its stock for insiders

Source: HEB

Central Market, owned by HEB Grocery

In 2015, HEB's family owners handed over about a 15 percent stake of the company to all of the retailer's employees aged 21 years or older. The requirement was that the employee must have been at the company for at least a year and clocked in at least 1,000 working hours in the previous calendar year.

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Currently, HEB maintains this newly formed status quo in an effort to combat low retail wages that make it difficult to save for short-term and long-term goals (let alone keep up with monthly bills).

In June 2020, HEB also made a temporary pay increase of $2 per hour permanent. However, hourly wages are still in the tens for most retail workers.

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HEB Grocery owners hold a lofty net worth

Once you look at the Butt family, you realize that giving company equity and a mild pay increase probably didn't hurt their wallet all that much. Forbes reports that the Butts family is worth a collective $17.8 billion as of December 2020. 

The HEB owners are ranked 15th among the richest families. Other families who function in the retail sector are also on that list including the Walton family, which owns Walmart.

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Butt launched the company more than a century ago with $60 (which holds a purchasing power of about $1,775.96 in 2021, based on an average yearly inflation rate of 2.96 percent). Considering this, it's actually pretty wild just how far the family has come.

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Who's in charge of HEB Grocery?

Currently, chairman and CEO Charles Butt leads the charge at HEB Grocery. He has been in the position since 1971. He helped HEB go from $250 million in annual sales to $28 billion in revenue by 2020. At $11 billion, his own personal wealth accounts for a good portion of the Butt family's overall net worth.

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The CEO is 82 years old and he doesn't have any children to take HEB over. We will have to wait and see who takes over when he decides to pass the torch.

HEB doesn't have IPO plans

I highly doubt HEB will go public while Butt is in charge, but it's possible that his successor could take the publicly traded route. As Grocery Dive's Grocer of the Year for 2020 (thanks to HEB's adequate COVID-19 pandemic preparation and response), there isn't any doubt that the public would be interested in an HEB Grocery IPO.


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