Change Coming for Latino Grocery Stores

Discussion
Mar 12, 2010
George Anderson

By George Anderson

The Latino population in the U.S. has grown rapidly in
recent years and with it has come a corresponding rise in the number of grocery
stores catering to this diverse consumer base, featuring products from their
countries of origin along with signage in Spanish.

In Colorado, The Denver Post reports,
eleven big box Latino grocery stores have opened since 2003. Many other states
across the country have seen Latino grocery stores pop-up to serve growing
populations of Spanish-speaking immigrants.

But, as with previous ethnic groups
that came to the U.S., assimilation is at work and it poses a challenge for
Latino grocery stores.

“The real growth in the Latino population is going to
come from the second generation,” David
Morse, president and chief executive of New American Dimensions and a member
of the RetailWire BrainTrust, told the Post.

“The first generation wants a culturally familiar shopping environment, and
that’s why this [Latino] grocery sector has been so popular,” Mr. Morse said. “But
the second generation can shop anywhere they want, so the comfort of a Hispanic
grocery is no longer an issue.”

Elisa Sandoval of Thornton, Colo. is an example
of assimilation at work. She shops at both mainstream grocers as well as Latino
stores.

“This is a comfortable place to shop,” she told the Post while shopping
in a Latino market. “My mom doesn’t speak much English, so this is a good place
for her. For me, it’s not a big thing.”

Discussion Questions: Will Latino grocery stores survive
as their target shopper base becomes more assimilated into American society
and culture? What will Latino grocery stores need to do to succeed as larger
portions of the Latino population are born and raised in the U.S.?

Please practice The RetailWire Golden Rule when submitting your comments.

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10 Comments on "Change Coming for Latino Grocery Stores"


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David Livingston
Guest
11 years 2 months ago
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… Read more »
Doron Levy
Guest
Doron Levy
11 years 2 months ago

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.

Gene Hoffman
Guest
Gene Hoffman
11 years 2 months ago

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.

Liz Crawford
Guest
11 years 2 months ago

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

Ralph Jacobson
Guest
11 years 2 months ago

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.

Bill Emerson
Guest
Bill Emerson
11 years 2 months ago

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.

Kai Clarke
Guest
11 years 2 months ago

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.

David Morse
Guest
David Morse
11 years 2 months ago

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.

Bill Hanifin
Guest
11 years 2 months ago

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.

Jerry Gelsomino
Guest
11 years 2 months ago

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.

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