COPPELL, Texas -- Minyard Food Stores here plans to launch new private-label Center Store Hispanic and non-Hispanic products this fall, when it also begins converting 11 of its Minyard's and Sack 'n Save supermarkets to its Hispanic-themed Carnival Food Stores banner.
The still-unnamed private label will bring new focus to the center of the store. "Canned vegetables will kick it off, and we'll expand to other products throughout Center Store and to the perimeter," said Ron Johnson, chief executive officer and managing partner for Minyard. "Most important is the item selection from the private-label standpoint and the value pricing."
Distribution will start in Carnival stores. If successful, the store-brand line will be rolled out to other banners.
Minyard already operates 24 Carnival stores, but the converted ones, expected to start opening in the first quarter of 2006, will put more emphasis on service in the perimeter departments and prepared foods intended for in-store consumption. They will have one, sometimes two, in-store cafes.
About 22% of the converted stores' total stockkeeping units will be Hispanic-themed, with the goal of increasing that to 33%, said Poul Heilmann, senior vice president of strategic planning and marketing for the retailer. In the center of the store, 19% of initial offerings will be Hispanic, with a goal of 30%.
Most of the employees and all marketing, merchandising and signage will be bilingual, Johnson said. The stores selected for conversion are in neighborhoods where Hispanics make up over 50% of the population.
The new Carnivals' biggest competitor will be Fiesta Mart. Johnson said that Carnival's expanded selection and competitive pricing would give it an edge. Fiesta Mart declined to comment.
Carnival also will have to contend with small stores and bodegas. "Part of the appeal of the mom and pops is authenticity and offering other services like wire transfers," said Sharmila Fowler, director of strategy and consulting for Cultural Access Group, a research and ethnic marketing services company in Naperville, Ill. Hispanic supermarkets can compete by offering these services while letting people stock up at lower prices, she said.
Still, the new stores should do well because the Dallas-Fort Worth's growing Hispanic population is underserved, suppliers and consultants in the Hispanic field agreed. "It'll be a great boost for both the Minyard's and the Carnival business because the stores are ideally located, and it will set them apart from the mainstream supermarket business," said Gary Long, executive vice president of B&R Enterprises, a Hispanic food and beverage supplier in Coppell.
Allen Lydick, president of Mexigrocers, a Hispanic marketing consultancy, said he thinks Carnival can lure customers away from smaller stores. "They're bright, cheerful and very consumer-friendly, like a large bodega," he said.
Long pointed out that between 2005 and 2015, the growth rate of the Hispanic population in the United States is expected to be five times that of the non-Hispanic population, which will translate into more potential consumers for Carnival stores.
"Unquestionably, this is not only a very smart move by Minyard's, but also much-needed by the target population," said Jan Rittenhouse, B&R's president. "The Latin population is far outpacing the supermarket industry's ability to serve its needs."
Long pointed out that Hispanics spend 35% more on groceries than the typical American family because they eat at home more and have larger families. Supermarkets that offer variety of SKUs, authenticity and a festive shopping atmosphere will have loyal Hispanic customers, Rittenhouse said.