LOS ANGELES -- Unified Western Grocers here has seen modest growth in its customer base over the last few years.
till comprise the majority of customers in the Pacific Northwest, retailers catering to Hispanic consumers dominate in Southern California while operators serving upscale shoppers have proliferated in Northern California, Chuck Pilliter, executive vice president and chief operating officer, told SN.
Of 2,000 customers in Southern California, 74% target the Hispanic community, compared with only 14% in 1990 and 36% in 1995, he said. At the same time conventional supermarkets -- those serving a more general, non-ethnic population -- declined from 70% of Unified's Southern California customer base in 1990 to 39% in 1995, and stand at only 10% today.
"The independent retailer in Southern California has found an absolute way to market to the Hispanic consumer, and our customer base has been growing as we grow that part of the business, Pilliter noted.
According to Al Plamann, president and chief executive officer, "Latino ownership is growing very rapidly, and it's accounted for a significant ownership change in the last three or four years as Southern California's demographics have shifted.
"It's a commonly held perception that independent retailers are chasing supermarket sales to catch up, but in this case, supermarkets are chasing independent sales as they constantly try to find ways to bring Hispanic consumers back into their stores with an appropriate product offering."
It's a different story in Unified's two other operating areas.
In Northern California, conventional markets have shrunk as a percentage of Unified's customer base -- from 90% in 1990 to 64% in 1995 to 42% in 2001 -- while upscale operators have grown from 2.6% of the total in 1990 to 10% in 1995 and 24% in 2001.
"The five richest counties in California -- where the average income in $100,000-plus -- are located around the Bay Area," Pilliter said, "and retailers there have developed a series of wonderful upscale formats that appeal to consumers with a lot of spendable income but not much time. As a result, they've developed fresh, prepared-food formats where 75% of sales are done in perimeter departments."
Interestingly, 75% of sales in Southern California's Hispanic operations also come from perimeter departments, Pilliter noted.
However, Hispanics comprise only 3% of Unified's volume in Northern California, up from 2% in 1995, he pointed out -- although those consumers dominate the area south of Fresno, in the San Joaquin Valley, Pilliter pointed out.
In the Pacific Northwest, conventional supermarkets have remained constant at about 60% between 1995 and 2001, as have cash-and-carry stores at about 33%. "To facilitate our growth there, we've expanded specialty food offerings to enable those independent retailers to differentiate themselves from the chains with unique item selections," Pilliter said.
