When big competitors began to siphon off sales, one retailer decided to find some new customers
Turning his mainstream supermarket into Oregon's largest Hispanic grocery store — Grande Foods — was no easy task, but Tom Evans regrets nothing, nada.
In fact, his big adventure has been gratifying in many ways, he said. Most notably, he and his co-owners are turning a better profit than they have in years.
That's despite taking less margin on key items, to keep retail prices on many items lower than they were previously.
“We have more business than we had even imagined we might get,” Evans said. “We did some projections, but honestly, we didn't know what to expect.”
Not only has Grande Foods drawn a loyal following from the Hispanic population in its hometown, Cornelius, Ore., but it also has retained some of its former, mostly Anglo, customer base.
“And we have people driving here from 20 and 30 miles away. People come here from Portland,” Evans said.
This 35,000-square-foot store was formerly called, like its sister store three miles away, Hank's Thriftway and was a community fixture for three generations.
While Evans said he wouldn't characterize himself as a big risk taker, he admits this venture was a bit risky. Local businesspeople, including other retailers, call Evans courageous.
“It wasn't as if this were a big chain, where they could re-channel some money if things didn't go right at one location,” said a local industry source. “In such a small company, if a step like this doesn't work, you're probably done.”
But Evans believes it was a matter of survival.
Fred Meyer opened a store a few years ago near his store in Cornelius, and then Winco came to town.
That was enough competition, but Wal-Mart has been planning to build a Supercenter minutes away.
With the threat of Wal-Mart, Evans tried to think of ways to keep the customers he still had.
Meanwhile, officials from Unified Grocers, his supplier, suggested Evans could find new customers — right in his front yard.
“While Tom was talking about keeping customers, I asked him what new customers he'd be willing to go after. I also told him we had guys at Unified who really understand what a Hispanic [product] mix is,” said Steve Sollom, Unified's director of sales, Portland.
Sollom had demographic studies done for the area surrounding the store, and, among other things, he found that the elementary school across the street from Evans' Cornelius store was 80% Hispanic.
Once Evans made his decision, the next step was to take him to visit successful Hispanic groceries in California and Arizona, Sollom said.
“What stood out were service meat counters, huge produce departments — with products fresh and priced right — and seating areas in delis that had the kind of [ready-to-eat] food customers would want to eat,” Sollom said.
Cornelius, 30 miles west of Portland, has seen its Hispanic population grow rapidly in the past few years. Now the city is at least 40% Hispanic.
“Between here and the coast, there are miles and miles of farmland and nurseries,” Evans said, explaining that Latinos were attracted to the area to work, and have stayed.
The store's new persona is quickly evident. The new logo is emblazoned across the front, and Latino music filters outside. On weekends, lines gather around a taco cart in front of the store. It's not beef tacos that are featured here, but tacos filled with tilapia or lingua (tongue), popular staples with Latinos.
Inside, there's more Spanish than English being spoken, and brightly colored piñatas hang overhead.
Then, as one enters the produce department, a mix tailored to the Latino community gets big play. A huge variety of peppers is featured. The display runs long. And unlike what is true at most supermarkets, this produce department's No. 1 volume mover is not bananas. Mangoes and melons are the contenders for top spot on the high-volume list.
At Grande, fresh produce makes up 20% of total store sales. That compares to 10% at Evan's other store, which is still called Hank's Thriftway.
“On opening day, produce took 30% of total sales. That blew me away,” Evans said. “We knew produce was big, but I think that surprised everybody.”
Bakery, too, is huge at this store, Evans said. In its former incarnation, this store didn't even have an in-store bakery. Now, the bakery — with its from-scratch pastries and cakes and a big variety of breads — is a featured department, rivaling produce for attention. Its sales are 9% of total store sales.
“Bakery is extremely important, especially for cakes,” Evans said. “The tres leches cake is a big seller. They use three milks in the ingredients. They're so good, so moist.”
The cakes are baked in quarter-sheet pans, and milk is poured over them after they're baked.
“We sell 50 to 60 of those every weekend. On a holiday, more like a 100 or 120.”
While the ISB's sales volume is big, so is its margin. At 73%, it's higher than most and beats the margin in the bakery at nearby Hank's by almost 10%.
“Our bakers don't waste anything,” Evans said. They put all the day-old things together and make another cake out of them. It turns out something like a pudding cake. Customers wait for those.”
Sweet breakfast pastries start off the day. The bakers start turning out fresh conchas, a doughnut-like pastry, first thing.
“On any given day, I'll sell a couple hundred of those between 6 and 8 in the morning,” Evans said.
That's everyday stuff, but the bakery is the source for celebration cakes, Evans said. In the local Hispanic community, the biggest celebration of all is Quinceanera, the day of a Latino girl's 15th birthday.
“People spend more on a Quinceanera cake than they do on a wedding cake, sometimes $700 and $800,” Evans said.
That was a surprise to him — as was the popularity of cow's heads during the Christmas holidays.
“The first year, at Christmastime, I brought in a hundred cow heads, and we sold them all the first day. Then, I got 100 more for New Year's and sold them all. The meat from the head is the tenderest part of the cow.”
Evans said that now, two years after he opened Grande Foods, he's still learning about what's popular and what's not, and he's open to suggestions from his customers.
“I tell them I'll get them whatever they want even if I don't know what it is.”
One of his Latino customers told SN she loves the variety of products Grande carries.
“Tom has everything there that I need,” said Lucy Aguilar-Garcia.
“I used to have to go to several different shops to get what I needed. Now it's all in one big place.”
Aguilar-Garcia said if she's having a party she can get everything at Grande, even down to the piñatas.
“Grande's cakes are wonderful. I go to a lot of birthday parties, and I can tell you 95% of the cakes come from Grande.”
Aguilar-Garcia has helped Evans hone the authenticity of some of his products, like suggesting he add some flour to his store-made tortillas to make them softer.
It has taken time, but by now he's got most of what his customers want, he said. Aguilar-Garcia confirmed that.
“Last month, one of my cousins was going back to Mexico, and he asked me what I wanted him to bring me back,” she said. “I told him I didn't want anything, because I can get everything I need here.”
The absolute necessities when he reformatted, Evans said, were a service meat counter, an extensive bakery, a big produce selection and a Latino deli, or cocina, with seating. Indeed, 60% of the selling floor now is devoted to perishables.
“Unified was extremely helpful. They've had a lot of experience in Southern California, where they have a lot of Hispanic grocers as customers.”
Grande's cocina has turned out to be a real boon.
“I have two women back there who can really cook,” Evans said. “Their most recent dish is chicken in a cream sauce, and is it good! They make carnitas [pulled pork], our best seller, every day, and then they try different things. They're all great.”
Aguilar-Garcia can testify to that. She said Grande is the only place she knows that makes authentic Mexican dishes and also corn dogs and hot dogs, which her 6-year-old favors.
“They make menuda, tripe soup, too, which my husband loves. I won't make it myself. I don't want to deal with those ingredients.”
While there's a lot of takeout, the seating for approximately 40 customers seems to be in constant use. It usually hits capacity on Sundays.
“My peak traffic is on Sunday afternoon,” Evans said. “Everybody goes to church, then they come here, with the whole family, to do their food shopping. When they're done, they push their shopping carts into the seating area and sit down to eat — and visit with each other, or maybe watch a soccer game on the TV in there. It's a social occasion.”
Even as he is developing a taste for lingua tacos, Evans said he still has lots to learn — about the Hispanic culture, as well as getting the product mix right.
But by now he believes he's well enough established to face any incoming competition.
“It doesn't bother me anymore that Wal-Mart is coming. People have to drive past us to go there, and they'll see the Grande Foods they've been hearing about. I think it'll be good.”