Urban consumers are seeing greater selection and product diversity in the grocery aisles, now that larger supermarket units are returning to the inner city.
Expanded product selection enables retailers to meet the specific brand and food requests of a more ethnically varied community, thereby increasing the stores' bottom line.
"Our customers don't come in just to buy specials; they buy their whole bill of groceries, which is why we concentrated so heavily on trying to get those brands they were used to seeing in their native country," said a source at Minyard Food Stores, Coppell, Texas.
Tastes, styles and textures of food vary among cultural groups found in inner cities, even if the people appear to be from the same background.
"You may want to categorize a group of people as Latin Americans, or Caribbeans, but, in fact, each of the subgroups within that broader category has certain product-buying patterns," said Rich Savner, director of public affairs at Pathmark Stores, Carteret, N.J. And stores with more square footage give the retailer greater flexibility to target those niche groups.
When asked how Price Chopper Supermarkets, Schnectady, N.Y., balances its grocery mix among its urban clientele, spokeswoman Joanne Gage said, "having a bigger store helps. That's the best we can do. It's tough, you're almost trying to be all things to all people."
Often difficult to find, urban sites of 4 to 6 acres provide the best venues for constructing these larger-than-normal inner-city markets. Adequate metropolitan real-estate properties exist in the form of abandoned warehouses or other "brownfield sites," left behind by light industry, explained Bernie Rogan, spokesman at Shaw's Supermarkets, East Bridgewater, Mass.
Before the advent of cars, 20,000-square-foot markets sustained inner-city communities. "Those stores were all [designed for] walkers and they came from a particular ethnic community. The majority of product related to that community," Rogan said.
After World War II, when motorized transportation became more widely available, urban dwellers moved out of the cities, and the supermarkets followed. Larger lots were available in the suburbs, so retailers increased the average size of the store. But today, as the industry races toward the millennium, suburban environments are overstored, while inner cities are short of food retailers.
"There are not any underserved suburban areas. If you're looking to grow your company, you have to find a place where there are a lot of people and not a lot of competition. The urban areas are perfect for that -- large populations and not a lot of supermarkets," said Todd Turner, vice president of urban affairs and diversity programs at the Food Marketing Institute, Washington.
Food retailers across the country realize the trend and are taking advantage of it.
"We look at it as an opportunity because all the major chains deserted that area, so we see an opening that's not as competitive as some others. It gives you some opportunities at profits," said the Minyard source. The Texas retailer has had representation in the Dallas/Fort Worth metro area for 12 years. Two of the chain's formats, under the Carnival and Sack 'N Save banners, are found in the inner city. Both Pathmark and Price Chopper, too, have had a presence in urban environments for several years, and continue to consider sites in these areas as a way to maximize their respective businesses.
When a chain enters an inner-city environment, as Shaw's did in New Haven, or as Giant Food plans to do in Washington, it is essential that it open its doors with a grocery mix appropriate for the demographics of the location.
Pathmark tests various products, Savner said. "There's nothing etched in stone. We adjust everything all the time because quite often the areas change demographically," he said. "But we do our homework before," he added.
To understand what the right mix is, retailers must do some research beforehand. Oftentimes, they look toward the community's citizens for guidance.
For example, Shaw's Rogan held a meeting in Waterbury, Conn., which 45 different ethnic community representatives attended. A similar caucus was held before the New Haven store opened.
"I pulled together leaders of the various ethnic and religious groups. We had our buyers and category managers meet one-on-one with the representatives that were there that night," Rogan explained. The objective of that gathering, as well as others organized by Pathmark or Giant, is to understand what customers expect to find on the shelves.
For Shaw's, getting the right products after they had been requested at the meeting was key. "That's been one of the secrets to our success in that store -- our ability to answer to the needs of a highly diverse community," Rogan said.
So while separate Asian and Hispanic grocery sections still exist in Shaw's urban stores, other ethnic dry goods have been integrated into the grocery mix, Rogan said. "Why relegate people because of their ethnicity when you've got such a diverse community? Integration has worked very, very well for us," he added.
Rogan said, for example, that the spice aisle in the New Haven store features Hispanic-branded spices alongside McCormick. About 8 feet is average for a spice aisle. The store's extra square footage allows Shaw's to lengthen its spice gondola by an additional 2 to 4 feet, Rogan explained.
Because preferences for cooking oils and rices differ by nationality, they command the close attention of Shaw's category managers.
In general, Hispanics and Asians consume a lot of rice, albeit different varieties. Rogan said Shaw's ran a sale at its North Quincy, Mass., location on 50-pound bags of jasmine rice, a variety favored by Asians. "Our store had it on the floor, and they were bringing it in a pallet a day during the course of the sale week. The Asian community from all over Boston was coming to this one Shaw's store to buy the rice," Rogan said.
Similarly, whenever there's a sale on cooking oil, Hispanics take home 5-gallon tins, or Italians purchase virgin olive oil, Rogan noted.
Other areas at Shaw's where ethnic foods are carving out profitable space include the beverage aisle, where Brazilian sodas are selling well; the frozens section, where Slavic foods are picking up; and the hot drinks aisle, where flavored teas are moving in areas with high concentrations of college students, Rogan added.
Rogan said that his larger inner-city stores are carrying from 40,000 to 50,000 stockkeeping units. He did not comment on what percentage are considered to be ethnic foods.
The source from Minyard told SN that the chain warehouses about 500 items that have been imported from Mexico, Colombia, Brazil and various Central American countries.
"We import sodas like Coke, Sprite, Pepsi and 7-Up from Mexico, because they have a special formula. [In Mexico], they still make these drinks with sugar," the source said. The sweeter drinks are preferred by Hispanics.
Minyard also imports a special tortilla flour and a laundry soap that has become the chain's top seller, he added.
Because African Americans and Hispanics tend to cook from scratch, microwavable or quick-fix items don't sell well in Minyard's Carnival or Sack 'N Save stores, the source said.
"Those are general areas where we cut back and spread out the items they do buy," he added.
Advertising in urban markets can be problematic, because it may require a chain to create separate promotions for inner-city stores. For example, Shaw's and Price Chopper cluster their advertising by area. Price Chopper sometimes uses direct mail, while Pathmark advertises in local daily and weekly newspapers.
According to Gage, Price Chopper has "reinvested" in its urban locations. "We haven't necessarily gone into new cities as much as totally expanded or remodeled some of our existing stores," she said.
In many cases, she added, the stores were small, about 35,000 square feet. "We've taken some of those stores and made them into 67,000- to 85,000-square-foot stores," Gage said.
Pathmark, on the other hand, is building from the ground up, as it did in the Harlem section of New York (see related story, p. 135). Another new urban unit is set to open in northern Philadelphia this year.
Last year, Landover, Md.-based Giant Food opened that city's first supermarket in 17 years. The chain is negotiating with Mayor Tony Williams of Washington to open two additional stores within the capital's city limits.
Shaw's new urban unit in the Greater Dwight area of New Haven, Conn., was built after derelict buildings were razed to make room for the supermarket.