Amazon looked at H-E-B, Whole Foods to break into grocery market, former executive says

A former Amazon employee suggested the Seattle-based e-commerce giant buy San Antonio-based supermarket chain H-E-B for $13 billion, according to an internal memo described to the Express-News. A former Amazon employee suggested the Seattle-based e-commerce giant buy San Antonio-based supermarket chain H-E-B for $13 billion, according to an internal memo described to the Express-News. Photo: Express-News File Photo Photo: Express-News File Photo Image 1 of / 33 Caption Close Amazon looked at H-E-B, Whole Foods to break into grocery market, former executive says 1 / 33 Back to Gallery

A former Amazon executive says the retail giant looked at San Antonio-based supermarket chain H-E-B before the online seller, instead, decided to buy Whole Foods as part of its massive push into groceries.

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Brittain Ladd — a former senior manager of strategy and expansion for Amazon’s Fresh and Pantry operations — suggested buying the 391-store San Antonio chain as an entry point into traditional brick-and-mortar retail in a 2015 internal memo, he said.

While the conversations about H-E-B don’t appear to have gotten very far, Ladd and other industry analysts said it’s an attractive target because of it’s strong regional footprint in Texas and Mexico as well as its strong customer loyalty. Ladd placed a value of $13 billion on the family-run operation. Industry analysts said other retailers probably have H-E-B on their shopping list as well.

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H-E-B’s limited reach would have allowed Amazon.com Inc. to implement a “crawl-walk-run” strategy when entering the food retail space, said Ladd, who now works as an industry consultant. That would have given Amazon time to learn how to operate H-E-B’s physical grocery stores before expanding the company into other states.

The Charles Butt family, the 23rd wealthiest in the U.S., owns the chain. The privately held company sold an estimated $23 billion worth of goods in 2016 and was valued at $10.7 billion by Forbes earlier this year.

It’s unclear how far Ladd’s suggestion went within Amazon. Ladd said he wasn’t privy to discussions within the company’s acquisition team so was unsure whether Amazon executives seriously considered pursuing the San Antonio-based company, or made a formal offer to buy the chain, when the e-commerce giant began perusing for brick-and-mortar grocers.

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Amazon and H-E-B officials declined to say whether the two companies held any exploratory discussions. Amazon spokesman Aaron Toso confirmed that Ladd previously worked there as a senior manager for the company’s Fresh and Pantry operations.

In a statement, H-E-B spokeswoman Dya Campos said, “H-E-B fully intends on remaining a proud Texas-based, independent and private company focused on serving our customers.”

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jfechter@express-news.net

Twitter: @JFreports