Chain's Growth Reflects Rise in Ethnic Population

ELLIOT ZWIEBACH

LYNDHURST, N.J. — H Mart, a chain of supermarkets catering to Asian consumers — and consumers who like Asian foods — will make a major statement this year when it opens eight more locations.

The chain, based here, which already operates 24 units all over the U.S., is part of a growing wave of stores catering to a growing Asian population.

“Asians are popping up all over — Laotians in St. Paul, Cambodians in Boston — and supermarkets often must learn through ‘immersion by fire’ how to cater to these groups,” David Morse, president and chief executive officer of New American Dimensions, Los Angeles, told SN.

“It's really a struggle for a lot of retailers to figure out how to get these folks and other ethnic groups into their stores,” he said.

H Mart operates four stores each in New York and New Jersey; three each in Pennsylvania and Georgia; two each in Maryland, Virginia and Illinois; and single units in California, Texas, Colorado and Washington.

“There are very few stores that cater to the Asian population,” Jimmy King, marketing manager for H Mart, told SN, “and as the scope of our business gets bigger, we want to open more stores in areas where there are a lot of Asian people or people who love Asian food.”

King said H Mart plans to open single units this year in New York, California, Virginia, Texas, Nevada and Massachusetts, and two units in Georgia.

The stores cater to a mix of Asian populations, including Korean, Japanese, Chinese, Vietnamese and Indian, he said. According to the company's website, “It is not unusual to spot spaghetti and sauce in one aisle and arroz and tortillas in the next, with kimchi and fermented bean paste nearby.”

The ratio of Asian to American foods depends on the population mix in the specific neighborhood, which can range as high as 70% Asian at some locations, King said.

H Mart also operates distribution centers in New York, Georgia, Illinois, Maryland and Pennsylvania. It buys Asian products overseas or from Asian distributors and uses a mix of U.S.-based wholesalers for conventional American items, including Supervalu, Minneapolis, and the White Rose division of Associated Wholesalers Inc., Robesonia, Pa.

Stores range in size from 15,000 to 90,000 square feet, with most locations in the 50,000-square-foot area, King said. Depending on size, stores carry between 20,000 and 40,000 SKUs, he added.

Some sections of the store, including the food court at larger units, and cosmetics shops, are leased to other operators, King said.

The “H” in H Mart stands for “healthy, humane, happy and heartful,” according to the company's website. The name H Mart is actually short for HanAhReum Asian Mart, a division of HAR Grand Corp., Maspeth, N.Y.

Emil Morales, San Diego-based senior vice president of the multicultural division of TNS North America, New York, told SN that traditional supermarkets need to cope with the increasing population of ethnic consumers.

“Demographics don't lie,” he said. “But as growth becomes harder to come by from the traditional marketplace, growth must come from groups that are growing in importance in the marketplace, and those are generally ethnic populations.”

Unfortunately, many supermarkets do not have the commitment of top managements to make their ethnic programs effective, Morales said.

“Very often they will do what they need to do to get by rather than develop programs for the longer term,” he explained.

Teresa Soto, president and CEO of About Marketing Solutions, Burbank, Calif., offered a similar viewpoint in a study on ethnic marketing. “The commitment of top-level supermarket management to make ethnic marketing a priority is rather limited,” she said. “Further, efficiency-oriented business models make it difficult for many supermarket chains to customize their offerings to ethnic consumers.”

Hispanics, Asian Americans and African Americans comprise 31% of the U.S. population today and are projected to grow to 50% over the next 30 years.