Change Coming for Latino Grocery Stores

Not all will survive, just the ones that change with the times and continue to provide a compelling shopping experience. There are some demographic challenges. In some parts of the country, unemployment still remains high. Hispanics are more mobile and willing to move to where the work is. So in areas where unemployment rates are low, we will see growth in Hispanic markets.

In other markets where I've worked, there seems to be pressure to crack down on illegal immigration. This is hurting local Hispanic markets because these crackdowns cause the population to shift to sanctuary cities. Existing grocers are getting better at marketing to Hispanic shoppers and continue to improve. My guess is that the small mom and pop Hispanic stores will begin to disappear and the larger, big-box Hispanic stores will continue to grow.

My ex-wife is Hispanic. Her older brother speaks Spanish but her younger brother only knows English. With the new generation of Hispanic children primarily speaking English, they will develop a culture different than their parents and it will be more in line with Anglos.

David Livingston, Principal, DJL Research

I always preach about the benefits of localizing your assortment to cater to your selling area. That can easily be reversed. If your Latino customer base wants more western products, then it's time to localize to that market. I've seen great small merchants truly balance their assortments. With Passover coming up, some of my favorite local grocers are going full tilt with offering up goods for that holiday while maintaining core products. This is where it pays to really understand the wants and needs of your local demographics.

Doron Levy, President, TheMortgageMachine.ca

How quickly assimilation actually occurs will determine the long-term viability of Latino grocery stores. Supposedly much of America is drifting toward segmentation and that raises a red flag for assimilation. Spanish-speaking Americans are rapidly rising in number and commercial clout and they have a pride in their customs and their language. So the assimilation process will take time and keep the Latino grocer in business for quite a while.

Gene Hoffman, President/CEO, Corporate Strategies International

The impact will be on mainstream stores: they will become more latin-ized.

Liz Crawford, President, Crawford Consulting

Here in Southern California there are myriad examples of how this is being addressed. However, I'll stand by the fact that no matter how much assimilation takes place with the newer generations, there will ALWAYS be a sense of nostalgia to enjoy the great heritage foods. A blend of new and traditional will always be appropriate.

Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

The long-term viability of Latino grocers depends on whether the national chains can learn to "localize" their assortments and better cater to the variety of customers. The fact that they don't/can't created the opportunity for the Latino grocers to satisfy a large and unaddressed market.

Walmart's recent organizational changes designed to move more decision-making closer to the sales floor would suggest that they, at least, are aware of this opportunity. That aside, the best of the Latino grocers will no doubt survive and flourish.

Bill Emerson, President, Emerson Advisors

Adapt or perish. This is a growing niche market, but its specialty, which is now its strength, will be its demise. These Latino markets have been strong during this era of assimilation, but as more and more Latinos consider themselves Americans first and Latinos second, the smart retailers will reposition themselves to reflect this changing perspective. Those that do not will perish.

Kai Clarke, President, Miraclebeam Products, Inc.

The biggest driver of growth in the Hispanic market will be the 2nd Generation.

That being said, as we Boomers get older and older, there's going to be a need for someone to pay into the social security system, assuming it survives. We need immigrants--documented or not--and barring any unforeseen global upheaval, the largest source will likely continue to be Latin America.

In the past year, we saw for the first time in a long time a drop in the foreign born population of the U.S. But that's probably a temporary glitch, caused by these bad economic times. Over the long term, the Hispanic immigrant population should grow, and these folks are going to want to shop in markets that offer them comfort and the products they are used to.

David Morse, President & CEO, New American Dimensions, LLC

The demand for Latino specific stores will be geography dependent in my opinion and may diminish over time. In South Florida, California, and some parts of New York, there are substantial numbers of first generation Latinos who enjoy the environment of a Spanish speaking store that offers familiar brands and products.

I do think the second generation is more likely to shop at mainstream stores, but may occasionally stop in to Latino-specific either for family, holidays, or nostalgic reasons.

I could almost foresee a trend away from these stores for the next 5 years with a resurgence as the second generation matures and associates Latino-specific stores as part of reclaiming their heritage.

It's happened before with other people groups and could happen here.

Bill Hanifin, Managing Director, Hanifin Loyalty LLC

As unique culturally-based stores expand, they will build a strong customer loyalty. The big chains will try to squeeze out the smaller ones with their one-stop-shopping approach, but those that really cater to their target customers' tastes and wants will survive.

I remember years back doing an in-store marketing audit of a Hispanic-inspired sub-chain of a large regional supermarket group in LA. It was great and a big draw for all ethnicities as it carried the freshest fruit, vegetables, and natural products in the area, even better that the parent company stores.

Jerry Gelsomino, Principal, FutureBest