ETHNIC SHOPPERS come in many nationalities, though Hispanic consumers from a variety of countries south of the U.S. border are the most common, with Asians a distant but potent second.
![<b>Traits:</b> Fast-growing population; tends to eat at home often.<br> <b>Habitat:</b> Often prefers mom-and-pop stores, or small chains that have created bonds with their communities, or Wal-Mart.](http://supermarketnews.com/images/0510_SNEthnicShopper.jpg)
“What's exciting for retailers, for the most part, is that ethnic shoppers spend more time eating at home, with most of the 21 meals a week eaten at home by ethnic consumers — and they tend to have more people around the table for each meal,” Bill Bishop, principal at Willard Bishop, Barrington, Ill., told SN.
With Hispanic and Asian populations continuing to show major growth, the ethnic market is a “huge and growing segment,” Bishop added.
Ethnic shoppers generally fall into three groups, Bishop pointed out: those who have just come to the U.S.; those who are in transition; and those who are fully acculturated.
Yet much of their business — especially among the first two groups — tends to go to mom-and-pop stores, Bishop noted, “because there are only a small number of American retailers that do a good job serving their needs. Wal-Mart is one that comes to mind in many categories in many stores.”
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Some Hispanic-oriented chains are not mom-and-pop stores but they are not mainline grocery stores either, Bishop said. “They are basically ethnic stores that serve specific populations,” he explained.
According to Jonathan Ziegler, an analyst with PUPS Investment Management Co., Santa Barbara, Calif., a conventional store that offers ethnic merchandise may not fit the needs of all ethnic shoppers. “To many Hispanics, a store like Gigante was too Anglicized for them,” he explained.
“To some degree it depends on how long a shopper has been in this country. Second- or third-generation ethnic shoppers are more likely to go to a conventional supermarket for ethnic foods if the supermarket in their area stocks merchandise to appeal to that segment.”
With Hispanics becoming the majority population in California, most supermarkets carry large ethnic selections as a way to broaden their appeal, Ziegler noted.
Some large traditional chains that have opened formats specifically targeting Hispanic consumers include Lakeland, Fla.-based Publix Super Markets, which has opened four “Sabor” locations in Florida. The stores include bilingual ads and product information, and an expanded selection that includes a larger variety of Caribbean, and Central and South American products. Hispanic products are integrated throughout the store.
Many smaller mom-and-pop ethnic stores, or smaller supermarket chains with an ethnic orientation, are able to survive adjacent to larger conventional supermarkets “because the owners of the smaller stores have bonded with the neighborhoods,” Ziegler said.
“They carry items a supermarket chain won't carry, or they drill down to offer more basics. They go for more authenticity, and they have a greater understanding of the unique products preferred by the ethnic group because the owner is generally closer to his own roots than anyone at the supermarket, regardless of whether the supermarket has hired nationals from that ethnic group to run its stores.
“I'm not sure how many store managers are as in touch with the ethnic groups in their communities the way the owners of the mom-and-pop stores are. It's just a more personal touch.”
The smaller operators can exist side-by-side with the chains “because they are not mutually exclusive,” Ziegler pointed out. “The chains probably get good ideas from those ethnic stores to determine their own product mix.”
According to a study of ethnic consumers by a CPG company, Hispanic mothers are focused on food quality and value, with an overriding interest in serving whole foods and made-from-scratch meals for their families.
For some companies, Hispanic marketing is viewed as “just a ‘line item’ within a brand or company budget,” the study said, “with a misguided approach of taking the English version [of a marketing effort] and running it through the Google translator.”
The study also said some companies make “the primary mistake of waiting for consumers to assimilate, rather than actively finding ways to connect meaningfully with them now.”