COPPELL, Texas — Minyard Food Stores' Carnival banner is broadening its appeal.
Originally conceived as a Hispanic format, Carnival is becoming a neighborhood store catering to the needs of a wider range of consumers, albeit with a basic Hispanic flavor to it, Michael Byars, president and chief executive officer at Minyard's, told SN.
“Carnival is our growth vehicle, but since our objective is to fulfill the needs and wants of customers in all the neighborhoods we serve, we're assessing the demographic mix of each trade area and adapting our merchandise offering accordingly to have the appropriate mix of products, service levels, pricing and quality.”
Minyard's decided late last year to use Carnival as its primary growth vehicle, based on projections that the Hispanic population in the Dallas-Fort Worth area will increase 40% over the next five years.
“We have stores that are already seeing that change,” Byars said, “and if we're not careful, we might miss out on that business if we don't adjust to the change.”
At the time it made the decision to grow with Carnival, the company was operating 21 stores under that banner. It has opened only one new Carnival store since then and just converted two Sack 'n Save warehouse stores last month for a total of 24.
But with its transition from self-distribution to buying from a wholesale distributor — Associated Wholesale Grocers, Kansas City, Kan. — expected to be completed by late fall, the company anticipates revving up the store conversion process late this year and into 2008, Byars said.
“We've identified as many as half of our Sack 'n Save stores to be moved to the Carnival brand over the next year, and it's likely all 17 of them will switch,” he indicated.
As for the 25 Minyard's-banner stores, Byars said, “That banner continues to do well for us, and we've made gains there in the last couple of years. And because there's a lot of history with that name in this market and because we feel good about the results there, we have not decided whether to convert any of those stores.”
To determine what a Carnival store needs to appeal to each neighborhood, the company spends six months doing demographic research, Byars said — studying data from the U.S. Census Bureau and from A.C. Nielsen and also conducting focus groups.
“We believe in focus groups — they're a great way to gauge how customers truly feel and whether they're getting what they want,” he indicated.
“When we decided to expand the Carnival brand, we determined the Latino populations around our stores ranged from 30% up to 70% or 80% or more,” he recalled. “But as we looked at the demographics more closely, we found there were other population groups in our trade area — African Americans, as high as 50% at certain stores, plus Asian Americans and Anglos — so we made a shift to tailor the merchandise at Carnival to avoid alienating those other groups.
“Focus groups allowed us to understand the customer needs and sensitivities of each neighborhood so we could broaden our target, and that's been a huge win for us, because even slight changes have made a big difference.”
While all stores carry a basic assortment, 30% of store merchandise is aimed at a Hispanic population, Byars said. “And in areas where 10% of the population base is Asian, we have an Asian section in produce and grocery.”
“The majority of products in the store satisfy every ethnicity,” Poul Heilmann, senior vice president, strategy and marketing, told SN, “but we recognize particular ethnicities in each area with special sections, and those sections are flexible enough to be expanded or made smaller as necessary.”
With a differing mix of ethnicities at each Carnival store, the company has developed several versions of its weekly ad, with different “buckets” highlighting items that appeal to different customer bases, Heilmann said.
“We've developed specific store clusters that focus on different ethnicities in different combinations, which helps us maintain our efficiency and adaptability, and which also results in different versions of our weekly ads,” he pointed out.
According to Byars, “What we learned from the focus groups was that different ethnicities enjoy shopping a Latino store, as long as we're sensitive to their more specific needs. And the employees must reflect that diversity.
“If we have a store that's 50% Latino, 30% African-American and 20% Anglo, the associates in that store should reflect that ethnic breakdown.
“One of the things people mentioned in the focus groups was one competitor in Dallas who had only Latino associates working there, and though consumers liked the store, the non-Latinos told us they didn't feel comfortable there because they couldn't communicate with the employees,” he said.
Another thing Minyard's learned from talking with consumers involved the music played in the Carnival stores, Heilmann indicated. “Initially we played Latino music exclusively, but given the different demographics, we heard back loud and clear that they wanted a mix of different music along with the Latino, so now we change the style of music we play every 15 minutes.”
Minyard's also initially planned to have all signage in Spanish-only at the Carnival stores, “but what we found when we tested the format was that even first-generation Mexicans wanted bilingual signs to help them learn English,” Byars said.
Adjustment of the Carnival stores to their neighborhoods is under constant review, Heilmann pointed out. “It's not static. We're always looking for ways to improve, change and adjust what we do, because the population around the stores is changing quite rapidly.
“For example, although the vast majority of Latinos in the Dallas area are from Mexico, we're seeing an influx of people from Central America, South America and the Caribbean, and we have to make adjustments for each group in terms of merchandising and the mix of associates that reflect those changes,” he said.
Under its new buying relationship with AWG, Minyard's retains the flexibility to do some of its own buying of Hispanic lines, “because that's where our expertise comes in,” Byars said. “And we're working to help AWG learn more about that business to utilize it for the rest of the cooperative.”