Sedano's Expands to Orlando With Albertsons Buy

JON SPRINGER

MIAMI — Sedano's Supermarkets has agreed to purchase three Albertsons stores in the Orlando area, marking the Hispanic retailer's first expansion away from its home base here.

The Albertsons stores, located in Orange Blossom Trail and Curry Ford Road in Orlando, and on John Young Parkway in Kissimmee, will transition to the Sedano's banner in the first quarter of 2010, Sedano's officials said. No purchase price was announced.

Recognized as the largest Hispanic-focused retailer in the United States, Sedano's currently operates 30 stores in South Florida, with estimated sales of about $442 million in 2008. Behind an understanding of the Hispanic shopper and a strong value offering, the company has been anxious to expand, Javier Herrán, director of marketing for Sedano's, told SN in an interview.

“We've been doing our homework on different areas of Florida to expand to, and we've been wanting to get into the Orlando market for some time now,” Herrán said. “[Investment banking firm] Food Partners approached us with the possibility of buying a few Albertsons stores there, and we jumped on it. We think they are going to be a great fit for us — the demographics of the area are about the same as what we serve here in South Florida.”

The sale to Sedano's continues a process of winding down the Albertsons brand in Florida. Albertsons LLC, an investor group led by Cerberus Capital, acquired about 140 stores there as part of the Albertsons Inc. breakup in 2006, but it operates fewer than 30 today after store sales and closures.

Herrán said the neighborhoods surrounding the stores it will acquire include consumers with roots in Cuba, Colombia, Puerto Rico and Mexico. The company also expects to draw former South Florida residents who have moved to the Orlando area.

About 90% of Sedano's shoppers are Hispanic, although the company has focused recent marketing efforts on “second generation” Hispanic shoppers who are bilingual and assimilated.

A traditional focus on price — with special attention to providing strong value on items its customers buy most frequently — has served Sedano's well during the economic downturn, Herrán said, citing double-digit same-store sales improvement this year. It has also provided Sedano's with an edge over the Publix Sabor format, which also is aimed at Hispanic shoppers, he added.

“The consumer has not been eating out as much, and that's good for us, but by the same token, they're not buying the impulse items they once did,” Herrán said. “They are holding off on buying the second flavor of ice cream, and instead of buying two heads of lettuce they're buying one. They've been shopping more frequently, but they're buying less than usual.”

Herrán said Sedano's would face competition not only from Publix, but from Bravo Supermarkets, a chain of independently owned Hispanic-focused supermarkets. Bravo is especially strong in the Orlando area, with eight stores. It operates 33 locations overall in Florida.

Albertsons told state officials that it would lay off 246 workers related to the sale. Those stores were expected to begin going-out-of-business sales shortly, Herrán said.