CHAINS AND INDEPENDENTS CATER TO HISPANIC SHOPPERS

David Merrefield

It may be little more than the art of the obvious, but Albertsons has opened three pilot stores called "SuperSaver Foods" in Los Angeles intended to cater to Hispanic shoppers.

It's obvious since Hispanics constitute nearly 50% of the population of Southern California, so why not? Strange to relate, though, Albertsons is the first major domestic supermarket operator to open a Hispanic-oriented format in Southern California in recent years. (See this week's front-page news feature.)

The previous attempt mounted by a major chain ended in failure. That attempt emanated from Vons Cos., which rolled out its Tianguis format in 1986. Eventually, Vons had nine Tianguis stores, but by 1994 all of them were shuttered. To many observers, the stores failed because labor costs were high. As an example, the stores featured in-store tortilla factories that channeled product on overhead tracks visible throughout the stores. It made for good theater, but it was highly labor intensive.

Other strikes against Tianguis included the grape boycott under way at the time and the fact that many Hispanics preferred to try shopping in American stores. That last factor could haunt Albertsons too since it currently captures about 27% of Hispanic food shoppers' dollars with its traditional formats. Will the new format cannibalize Albertsons' existing business? Other Hispanic-oriented stores in the Los Angeles area include Gigante, the large-scale food retailer based in Mexico City. Gigante has five stores in Southern California with three more in the works.

But much of the Hispanic business in Southern California is being won now by independent supermarkets. The best way to show that is to cite numbers reported earlier in a SN news feature about Unified Western Grocers, the cooperative wholesaler in Los Angeles. Unified supplies some 2,000 stores in Southern California, of which 74% target Hispanic shoppers. In 1995, 36% of the stores Unified supplied targeted Hispanics. In 1990, it was just 14%. These numbers not only illustrate the demographic sea change in Southern California, but show once again that independents can succeed if they're nimble enough to detect change and cater to it before major players awake to what's going on.

"It's a commonly held perception that independent retailers are chasing supermarket sales to catch up," remarked one Unified executive quoted in the May 20, 2002, SN feature. "But in this case, supermarkets are chasing independent sales as they consistently try to find ways to bring Hispanic shoppers back into their stores with an appropriate product offering."

In a similar vein, Associated Wholesale Grocers, the wholesaler in Kansas City, Kan., has developed an "Authentic Hispanic" product line -- more than 300 stockkeeping units deep -- for use by independent affiliates. A SN news article of Sept. 2, 2002, about the program shows that nearly 500 of the 850 independent stores AWG supplies in a 10-state area may be candidates for the Authentic Hispanic product line.

Another Hispanic-oriented initiative from the heartland was mentioned in a SN news brief of Sept. 16, 2002: It seems that Indianapolis-based Marsh Supermarkets has opened its "Saving$ Mercado" format.

Does anyone hear opportunity?