Some of the fastest growing food retail chains in the United States are the so-called ethnic supermarkets, with very strong differentiators in their assortments, especially targeting groups such as Hispanics and Asians, as shown by the numbers in the main U.S. sales and market share rankings.
These rankings show Santa Fe Springs, California-based Superior Grocers, which posted an estimated $1.6 billion in sales from its 42 supermarkets last year, nearly doubling its size over the past five years, as the leader among ethnic supermarkets.
The great success of ethnic supermarkets in the U.S.A.
Next to Superior Grocers is El Súper – Bodega Latina, based in Paramount, California. The company, a division of Mexico-based Grupo Comercial Chedraui, had estimated sales of $1.2 billion at its 45 supermarkets.
Ranking in the top 50 are three of the 10 largest Hispanic supermarket chains – Northgate Gonzalez Market, No. 3 with an estimated $918 million in sales; Cardenas Markets, No. 5 with an estimated $856 million in volume; and Supermercados Vallarta, No. 7 with estimated sales of $800 million.
Other ethnic supermarket chain operators that are showing growth include Sedano’s with 33 supermarkets, a Hispanic operator based in Hialeah, Florida, and Tawa Supermarkets of Buena Park, California, an operator with 37 stores targeting the Asian market. In Texas, Fiesta Supermarkets currently has 60 stores open in the Houston, Austin and Dallas-Fort Worth markets, serving customers from more than 90 countries of origin.
What many of these operators have in common is their increasingly broad appeal beyond demographics. Superior Grocers, for example, is positioned as a destination for “bargain hunters” of any ethnicity, but others may also benefit from the mainstream of ethnic cuisines.
John Rand, senior vice president in the Cambridge Mass, office of Kantar Retail, said there is a great opportunity for traditional retailers to embrace multicultural positioning that focuses on popular products, regardless of ethnicity or origin.
It’s about marketing to a group of people who have adopted that culture as their own, the big win for retailers and suppliers is what’s going to go mainstream.John Rand, Kantar Retail senior vice president.
The following four ethnic formats – two independents and two that are divisions of large traditional supermarket companies – show how they are evolving to meet the needs of their respective customers.
- Basha’s Food City Banner, with 48 locations in Arizona, has led to innovations that have been adopted by its parent company in traditional Bashas stores. Food City offers menus with green chili and chicken outside its stores, for example, a popular feature that has been adopted by Bashas and has also brought some great displays of more visual products from the Food City EDLP format.
- Rhee Bros. Assi Plaza, a six-store chain based in Hanover, Maryland, was founded as a concept offering staple foods such as Asian rice, oil and Korean kimchi prepared for cooking and is working to maximize its appeal to different ethnic groups and to second-generation Asian immigrants. “Today you have modern [ethnic] concepts, modern equipment and what you look for in products today have English labels,” said co-owner Robin Rhee.
- New York-based Net Cost Market focuses on Eastern European assortments – items popular with immigrants from Russia and Ukraine in the Brooklyn-based company’s home market – but has expanded to be more of a specialty ethnic grocery chain offering hard-to-find imports at affordable prices. These include items from France, Germany, Italy, Bulgaria and Greece, as well as Eastern European states such as Ukraine, Russia and Latvia and Uzbekistan in Western Asia. In addition, Net Cost Market imports a large selection of herbs, spices and other products from India, China and Vietnam.
- United Supermarket’s Amigos Banner, acquired by Albertsons. “United Supermarkets stores are a fun, festive place to shop for a wide range of customers,” said Juan Enchinton, director of Hispanic initiatives for United Supermarkets.
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