The H-E-B Effect: Suddenly Every Project Needs A Grocer

There's a new anchor in town.

The meteoric population growth of Dallas-Fort Worth and the shift in shopper expectations from the entrance of H-E-B have caused retail and mixed-use developers to put supermarkets on their must-have lists.

“If I see a grocery store there, as a landlord developer, I know I'm going to be able to backfill the rest of my shopping center or my mixed-use project,” Weitzman Senior Vice President Ben Terry said. 

Of the 1.5M SF of new retail space delivered in 2024, 696K SF of it was for traditional grocers. That total is likely to be surpassed this year with huge H-E-B stores coming online in Melissa, Rockwall and Prosper, as well as 120K SF Kroger Marketplaces in Fort Worth and Plano.

Next year could see an even larger total of new grocery stores, as planned H-E-B stores in Denton, Euless, Forney, Las Colinas, Mesquite and Murphy may exceed 2024’s total on their own.

The arrival of H-E-B to the Metroplex in 2022 set off a chain reaction of one-upsmanship and growth among area grocers that has residents spoiled with stores that offer more products than ever. 

“In the last five years, grocery stores have changed significantly,” said Maher Maso, principal at Ryan and former mayor of Frisco. “Some grocery stores have everything you need besides groceries.”

As supermarkets have become destinations in DFW, they have emerged as the top choice to anchor new retail developments. 

They are also playing a much bigger role in top-tier mixed-use developments that have evolved to providing a 24/7 experience for residents, Maso said. Property owners like grocers’ broad appeal, the diversity they bring to a development and how frequently visitors swing by.

“The evolution of grocery stores was critical to make mixed-use even more successful,” Maso said. “Now you're seeing these significant grocery stores that the developers really need in there to attract the other components.”

Weitzman declared 2024 the “Year Of The Grocer” and repeated the distinction this year during the firm's annual forecast events. 

No new grocery stores opened in the Metroplex in 2021, according to Weitzman. The first H-E-B stores arrived the following year, and more followed in 2023. That was when grocers became a key ingredient in new retail developments.

“A strong grocery anchor is a cornerstone that really keeps the whole shopping center resilient and relevant,” Terry said.

The Metroplex’s continued population and residential growth has fueled that grocery expansion. DFW is on pace to overtake Chicago as the nation’s third-largest metro by 2030, and the Census Bureau estimates more than 450 people move to the Metroplex each day. 

“Simply put, everybody needs a grocery store,” said Tim Campbell, head of development for the $3B development The Mix in Frisco. “Every family is visiting a grocery store at least weekly, and the need for groceries isn't going away.”

Much of the grocery store growth in the Metroplex has occurred in the suburbs, where H-E-B and the region’s biggest grocer, Walmart, continue to duke it out. 

After years of no new Supercenter construction throughout the U.S., Walmart has three of its largest-scale stores on the way in Frisco, Melissa and Celina. H-E-B plans to spend $20M on a Fort Worth hub to support its continued expansion in North Texas, and it announced plans for its first Dallas store at the beginning of the year. 

Community demographics play a big part in finding the right fit for a project and whether a development needs a Tom Thumb, Kroger or Whole Foods, Terry said. 

“If one of those tenants said, ‘Hey, we want to come to your development,’ we would be ecstatic,” he said.

Whole Foods is set to anchor the retail portion of the 112-acre mixed-use development The Mix at the corner of Lebanon Road and the Dallas North Tollway. It will include 375K SF of restaurant and retail space as well as medical offices, two hotels, townhomes and multifamily units.

The high-end grocer has long been desired by Frisco residents and was attached to a previous development at the site that didn't work out.

“It was possible to proceed without a grocer, but we knew that grocers are important to mixed-use developments,” Campbell said. “[Whole Foods] will drive traffic, offer an elevated shopping experience and provide a crucial amenity to those working at, living in or visiting the development.”

Whole Foods also anchors the retail at the 53-acre West Grove mixed-use development in McKinney. The grocery store element helped that development become an activity center for McKinney, Maso said. 

Many new supermarkets have become destinations in their own right, and they are almost a necessity for mixed-use projects to be successful, he said. 

“If you look at the latest, greatest mixed-use developments, almost every one has a grocery store,” Maso said.

But supermarkets don’t fit in every project, Gillon Property Group CEO Drew Steffen said.

The newly formed firm that represents the interests of the family of Dallas investor Ray Washburne is looking at opportunities with retail-anchored mixed-use centers in the Metroplex, but Steffen said those projects likely won’t include a grocer. He envisions the firm creating communities and developments that are walkable districts in areas of the city that aren’t best for driving.

“It's not often that I go to the grocery store and intend to walk around a bunch with my ice cream melting,” Steffen said. “We like grocers to bring diversity, but we're more focused on pedestrian experience.”

With a new law that allows developers to add multifamily housing in any areas zoned for commercial property in Dallas and many of the Metroplex's biggest cities without the need for public hearings, variances or any zoning processes, much of the region could soon see an increase in density. Dallas officials also passed parking reform in May that opens the door to new housing options and redevelopments.

Those changes could lead to more options for grocers in mixed-use projects, Terry said.

“As we start going more vertical, you're going to see grocery stores figure out a way to really fit into that mixed-use development product type,” Terry said.