H-E-B said Wednesday it plans to hire 500 employees to staff a new technology center at its headquarters and consolidate its digital workforce in San Antonio under the same roof.

It was welcome news for the city’s nascent tech industry and its advocates, many of whom were stung by the local retailer’s decision earlier this year to launch a technology facility and innovation lab in Austin and hire hundreds of new workers there. The hub opened in June.

“It shows H-E-B feels like they can meet their talent needs in San Antonio,” said David Heard, CEO of local industry group Tech Bloc. “Does it mean San Antonio has arrived as a tech hub? No. But H-E-B doubling down on technology here … is tremendous.”

Heard previously called H-E-B’s decision to open the Austin facility a “continued call to action” for locals.

Construction of the San Antonio center is expected to start by next summer and wrap up in summer 2022. The five-story, 150,000-square foot building on the company’s downtown campus will house up to 1,000 of its digital employees.

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The facilities in Austin and San Antonio will work together on the company’s mobile and online operations, expanding its delivery options and developing a new app, said Jag Bath, chief digital officer at H-E-B and CEO of Favor, the delivery startup H-E-B acquired last year.

The bulk of H-E-B’s digital workers are in San Antonio, he added, with the Austin lab serving as the headquarters for Favor and as a worksite for H-E-B’s Austin tech employees.

The company said the San Antonio space will be similar to the Austin hub, with open work spaces and meeting rooms wired for video conferencing and other technology.

H-E-B declined to specify how much the facility will cost but said it doesn’t plan to seek any city or county grants or tax incentives. The retailer also is adding a parking garage, employee bridge and other features as it expands its headquarters.

The technology center will help with the company’s recruiting efforts as it seeks to “stitch digital into the fabric of H-E-B,” Bath said.

People’s shopping habits are changing — they’re browsing H-E-B’s website and using its app, Bath said, as well as visiting the company’s bricks-and-mortar stores. They’re after convenience, pushing the retailer to offer more delivery options, add a new app — which is expected to launch later this year — and focus on other consumer-facing technology.

“We’re investing more deeply in digital to bring both together,” Bath said.

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The new technology positions will include roles in digital product management and design, e-commerce and engineering.

“They span the spectrum of digital jobs,” Bath said.

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H-E-B is vying for shoppers with Amazon, which acquired Austin-based Whole Foods in 2017, and other major retailers.

After acquiring Favor last year, H-E-B beefed up its tech hires and is working to expand curbside pickup and grocery delivery services to 200 of its 400 stores by year’s end.

The retailer has built fulfillment centers to handle online orders and is planning to construct a massive distribution and manufacturing plant on San Antonio’s East Side.

The company also is exploring self-driving technology, starting with testing an autonomous van on streets around its Olmos Park store this fall.

“We have a company here that’s committed to experimenting in retail,” Heard said. “They’re up against strong competition.”

Other retailers also are pouring money into tech while attempting to keep prices low and shorten shipping and delivery times, a challenge in the low-margin, hyper-competitive grocery industry.

Companies are using automation, artificial intelligence and data to guide how they do business, enabling them to learn more about customers and tweak operations.

Amazon and Walmart are expanding delivery networks and offering in-home options, allowing customers to have items dropped off in their kitchen or garage. Kroger has developed a digital shelf that shows prices, nutritional information, ads and coupons.

Walmart also has added autonomous shelf-scanning and floor-scrubbing machines and computerized unloading systems. Employees outfitted with scanning devices and plastic bags help customers skip the checkout lines. Similarly, at some H-E-B stores people can pay for their groceries through an app without having to set foot in a checkout line.

But investing in tech is an expensive undertaking, particularly when it comes to delivery, retail analyst Jan Kniffen said. Autonomous vehicles can cut the cost of drivers and shipping, but they are still being developed and it’s unclear how liability issues and state regulations will be ironed out.

“Everybody’s looking at this,” Kniffen said.

madison.iszler@express-news.net