THE YEAR RETAILERS EMBRACED THE ETHNIC CHALLENGE

David Orgel

This won't be known as the year that supermarkets first discovered the opportunities in ethnic merchandising. That happened some time ago.

But 2001 may go down as the year that the industry got more serious about addressing the opportunities.

A number of retail companies around the country, including some in the Northeast, have recently added executives dedicated to ethnic merchandising as they tinker with new in-store experiments. Late last month Kmart expanded its new distribution agreement with Fleming Cos. to include ethnic foods, among other categories. And the WorldWide Retail Exchange just formed an alliance that will give retail members access to hundreds of Asian food and beverage suppliers in China (including Hong Kong), Taiwan, India and other Asian countries.

These examples of developments follow convincing consumer data on the growing demand for ethnic foods both from immigrant and established American populations. In a Parade Magazine survey excerpted last month in SN, more than one in five Americans said they are eating more ethnic foods than they were two years ago.

One company with an admirable record of attention to the needs of ethnic consumers -- including Hispanics, Jews, Muslims, Asians and African-Americans -- is Pathmark Stores. But even Pathmark didn't have an executive working full time on this initiative until a year-and-a-half ago. That's when it named Denys Williams, a 22-year company veteran, to the position of director of ethnic merchandising, with responsibilities that cut across many departments.

Since the time of his appointment the chain has rolled out enhanced in-store presentations, including a unit in Brooklyn with large kosher displays and one in Weehawken, N.J., with improved merchandising for Hispanics.

In speaking with Williams recently I took away three points about Pathmark's experience that might be adapted for the industry in general.

First, ethnic merchandising requires a long-term commitment and lots of research. As an example, Williams noted, the Hispanic sector has many subgroups, such as Cuban, Puerto Rican and South American, all of whose tastes must be extensively researched. Sounds like a lot of work. But here's the second point: Stores like Pathmark probably don't have a choice. Their business is so heavily concentrated in ethnic neighborhoods that they absolutely need to study and react to the needs of these groups.

That brings me to the final point: Ethnic shoppers want supermarkets to succeed.

Not that these consumers don't have alternatives. Local bodegas, in particular, are growing and getting more sophisticated.

But supermarkets can acquire new business if they get serious about ethnic merchandising.

"Supermarkets can win this shopper because we offer full lines of products," Williams said. "We just need to face up and deal with it."