Omni Talk’s Chris Walton and Anne Mezzenga sat down with Prabash Coswatte, COO of Heritage Grocers Group, at Grocery Shop 2025 in the VusionGroup’s podcast studio. Prabash shared candid insights about operating four distinct banners across multiple markets, the reality of competing as a $3 billion regional player against national giants, and why mid-tier grocery consolidation may be the path forward.
From IT Guy to Chief Operating Officer
Prabash’s journey in retail started 18 years ago when he told himself he’d only stay six months at 99 Cents Only Stores. He ended up spending eight and a half years there, discovering his passion for technology in retail. His career evolved at what was then Cardenas Markets (now part of Heritage Grocers Group), where he expanded from IT into real estate, construction, maintenance, administration, loss prevention, and eventually operations.
Today, as COO, Prabash oversees operations, manufacturing (including a baked goods plant in Texas), warehousing, and logistics. His philosophy centers on two principles: putting customers first in every decision, and ensuring all back-office functions exist to support stores—the bread and butter that keeps customers happy.
🔑 Four Banners, One Fresh-Forward Vision
The Grocery-Rant Experience
Heritage Grocers Group operates four distinct banners serving different communities:
- Cardenas: Operating in Las Vegas, California, and Nevada
- Los Altos: Serving Arizona markets
- Tony’s: Based in Chicago
- El Rancho: Operating in Texas and one store in Kansas
Prabash describes Heritage stores as “grocery-raunts”—full-theater experiences that lead with fresh. When customers walk in, they encounter fresh produce first, smell fresh bakery items and pan dulce, see fresh cakes and pasteles, and visit full butcher and meat markets where Heritage breaks down meat in-store. At Cardenas locations, they go from corn kernel to masa to tortillas—and sometimes chips the next day—all made in the store.
The kitchens are central to the experience, with some items made from scratch. Prabash admits Taco Tuesday ($1.25 tacos, $1 in Texas) doesn’t help his weight loss goals, but creates the energetic, exciting environment that keeps customers coming back.
Operational Excellence Across Diverse Markets
Standardized Metrics, Banner-Specific Benchmarks
Prabash tracks high-level metrics consistently across banners—sales, items per basket, basket composition, average item price, labor efficiency, self-checkout utilization, stocking rates, and receiving accuracy. However, he benchmarks performance by banner and geography, recognizing that Cardenas, Tony’s, and El Rancho operate as different concepts serving different markets.
One of his favorite rituals happens every Monday morning at 6 AM Eastern. He sends a company-wide email recapping weekend sales performance—how Heritage performed overall, banner-by-banner results, and spotlight stores that excelled. Initially unsure if anyone read these emails, he discovered during store visits that teams crave recognition and compete intensely to be featured. This internal competition creates energy and accountability across the organization.
Right-Sizing Inventory and Delivery
Heritage began a CGO (computer-generated ordering) journey three years ago, primarily to optimize store-level inventory. The goal was freeing up cash tied up in unproductive shelf inventory. They extended this upstream to warehouse optimization, partnering with wholesalers UNFI and AWG while determining what Heritage should stock in-house.
With store sizes ranging from 25,000 to 60,000 square feet, Heritage adjusts delivery frequencies and volumes accordingly. Prabash shared a practical example: Texas stores weren’t receiving Monday deliveries despite busy weekends that depleted inventory. Fresh department teams struggled knowing what to order to last through Monday until the Monday night delivery arrived. Heritage is changing the delivery schedule to better support store operations—the kind of continuous adjustment that characterizes their approach.
Technology That Enables Fresh and Efficiency
Heritage partners with Upshop for inventory management and fresh item management. Prabash emphasized that technology serves two purposes: making team members’ lives easier and keeping products fresh for customers. Interestingly, when implementing fresh item management systems to reduce shrink, Heritage discovered an unexpected benefit—sales lifts. Customers noticed fresher products, proving that operational improvements directly benefit the top line, not just margins.
Looking ahead, Heritage is investing in pricing and promotion technology. With economic headwinds including a potential government shutdown affecting benefit recipients and government workers—key customer segments—pricing agility becomes critical. Heritage works with Vusion to enable faster competitive price adjustments on key value items, potentially implementing changes the same day instead of waiting for scan coordinators to work the next day. The goal is promoting the right items while eliminating ineffective promotions, driving both sales and profit protection.
The Future of Regional Grocers: Consolidation and Strategic Investment
When asked about the future for regional grocers, Prabash offered a candid, forward-looking perspective. At $3 billion in sales, Heritage is fairly substantial—but compared to Walmart, Kroger, or Albertsons, they’re relatively small. Larger competitors have arsenals of capital and technology that create competitive advantages.
Regional grocers face tough investment decisions: Do you invest in lower item prices to make customers happy, or in technology to create efficiencies? Strategic, intelligent investment allocation becomes essential for survival.
Prabash predicts consolidation among mid-tier retailers—and views this as potentially positive for customers. Larger scale provides better leverage, enabling improved service and better pricing. The critical caveat: acquirers must preserve what made each banner special. Heritage applies this principle to their own acquisitions, recognizing that customers choose specific banners for specific reasons worth protecting.
The Bottom Line
Heritage Grocers Group demonstrates that regional players can compete through differentiation—leading with fresh theater experiences, maintaining strong community connections through distinct banners, and making sharp, strategic investments in technology and operations. While Prabash sees consolidation ahead for mid-tier grocers, he believes it’s not necessarily bad if done thoughtfully, preserving what makes regional banners special while gaining the scale advantages needed to serve customers better in an increasingly competitive landscape.
🎧 Want to hear the full conversation? Watch above or listen via your favorite podcasting platform:
Apple Podcasts | Spotify | Amazon Music
Be careful out there,
– Chris, Anne, and the Omni Talk team
Music by hooksounds.com
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Omni Talk® is the retail blog for retailers, written by retailers. Chris Walton founded Omni Talk® in 2017 and have quickly turned it into one of the fastest growing blogs in retail.