FOOD 4 LESS GROWS HISPANIC MARKETING PROGRAM

David Orgel

PALM DESERT, Calif. -- Food 4 Less is leveraging its perishables and Hispanic marketing expertise to fuel fresh foods sales growth for the 133-unit retail operation.

The Los Angeles-based chain, a division of Kroger Co., Cincinnati, is increasing its commitment to Hispanic customers with more in-store space devoted to this segment and new marketing programs, said Tim Mulhall, group vice president, perishables, in a presentation here.

"We go to market based on the neighborhood, whether it's Hispanic, an urban store or something else," he said. "We know our customers."

Mulhall spoke to an audience of suppliers, distributors, sales agents and retailers here at the 35th National Deli Seminar of the Dairy Deli Bakery Council of Southern California.

Food 4 Less recently opened its 17th carniceria, or service meat operation. "We're competing with smaller carnicerias in local neighborhoods," Mulhall said. "We've seen tremendous growth, sometimes as much as 50%, in stores where we take out conventional meat cases and put in service counters."

The chain is partnering with Walt Disney on the third annual "Fiesta Latina." It is also working with a number of national brand suppliers on a "Fiesta de Ahorros" parking lot event.

Food 4 Less' Hispanic marketing efforts are driven by the makeup of its neighborhoods. Almost 54% of the retailer's shoppers are Hispanic, as are about 60% of its employees.

But fresh foods involves more than just ethnic merchandising for Food 4 Less, which relies on perimeter departments even more than many of its area competitors.

"Perishables separates Food 4 Less from our competition," he said. "Our powerful, high-volume perishables departments do close to 50% of our total store sales. Most of those departments have some of the highest numbers in the industry. Perishables -- including meat, deli, dairy and produce -- highlight our ads."

In the company's newest stores, service deli/bakery is now the first department customers see after passing the wall of values in the front of the store. Produce is another key department representing almost 20% of the sales floor. The meat department features competitive prices and large family packs.

"Our stores emphasize mass displays and great retail prices," he said. "It's all about moving products."

Mulhall said the chain's success with full-pallet programs in dairy and deli from 2002 to 2003 led to sales of more than 30 million gallons of milk and 700 million tortillas.

"And that's only in a 133-store group," he stressed. Food 4 Less operates the bulk of its stores in Southern California but it also has units in Northern California and Las Vegas. It's most recent expansion is in the Midwest with two stores south of Chicago and one in Indiana. Three additional Midwest units are planned this year.

"Within five years we plan 20 high-volume stores in the greater Chicago area," he said. Mulhall encouraged suppliers to work with Food 4 Less to develop compelling deals for consumers.

"We're all about pallets and truckload quantities, and we encourage manufacturers and brokers to bring deals to us," he said.

He also urged suppliers to pursue programs with the new Midwest operation to help fuel its growth. "Get in touch with our Chicago group," he said. "They sometimes have difficulty being called on by the trade."