One of the most rapidly growing food retail chains in the United States are ethnic supermarkets, which targets groups such as Hispanics and Asians, as documented by the numbers of major sales ranks and U.S. market share.
These rankings show Superior Grocers, based in Santa Fe Springs, California as the leader of ethnic supermarkets, which marked an estimated $ 1.6 billion in sales from its 42 supermarkets last year, nearly twice its size in the past five years.
Next to Superior Grocers is El Super – Bodega Latina, based in Paramount, California. The company, a division of the Mexican-based Chedraui Commercial Group, had estimated sales of $1.2 billion in its 45 supermarkets.
In the top 50 ranking, there are three of the 10 largest Hispanic supermarket chains – Northgate Gonzalez Market at number three with with an estimated $918 million in sales; Cardenas Market at number five with an estimated $856 millions and Vallarta Supermarkets at number seven with sales estimated to be $800 million.
Other ethnic chain operators showing growth include Sedano’s with 33 supermarkets, a Hispanic operator based in Hialeah, Florida, and Tawa Supermarkets in 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 over ninety countries of origin.
What many of these ethnic supermarkets have in common is their increasingly broad appeal beyond demographic characteristics. For example, Superior Grocers offers itself as a destination for “hunting-offers” of any ethnic group, but others may also be benefited by mainstream ethnic cuisines.
John Rand, Senior Vice President of the Cambridge Mass part of Kantar Retail, said that there is a great opportunity for traditional minorities to embrace a multicultural positioning that focuses on popular products, regardless of ethnicity or origin.
Rand said, “It’s about marketing to a group of people who have adopted that culture as their own, the big win for retailers and vendors is what’s going to go mainstream.”
The Evolution of Ethnic Supermarkets
The next four ethnic formats – two independent and two 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. For example, Food City offers menus with “chiles verdes” and chicken out of their stores, which is 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 chain of 6 stores in Hanover, Maryland, was founded as a place that offers meals such as Asian rice, kimchi oil and kimchi prepared for cooking. It is working to maximize its appeal for different ethnic groups and for second generation Asian immigrants. “Today you have modern [ethnic] concepts, modern equipment and what you are looking for in products today have labels in English,” said co-owner Robin Rhee.
- Net Cost Market, based in New York, focuses on Eastern European assortments- popular items among immigrants from Russia and Ukraine in the Brooklyn national company market – but has expanded to be more a chain of specialty stores that offer hard-to-find imports at affordable prices. Included among them are articles from France, Germany, Italy, Bulgaria and Greece, as well as Eastern European states such as Ukraine, Russia and Latvia and Uzbekistan in West Asia. In addition, Net Cost Market imports a large selection of herbs, spices and other products from India, China and Vietnam.
- United Supermarkets’ Amigos Banner, purchased by Albertsons. “The United Supermarkets’ stores are a fun, festive shopping place for a wide range of customers,” said Juan Enchinton, director of Hispanic initiatives for United Supermarkets.