PRINT THIS STORY:

CHANGE TEXT SIZE:

PUBLIX EXPANDS HISPANOCENTRIC SABOR SUPERMARKETS

By María Bird Picó

Publix Super Markets, the first of the major traditional supermarket chains to roll out grocery stores primarily targeting Hispanics, is expanding the concept.

Two Publix Sabor stores (sabor means “flavor” in Spanish) are slated to open next year in south Florida. Two Publix Sabors opened last year — one in Hialeah, outside Miami, the other in Kissimmee, an Orlando suburb.

“If Publix is adding more Sabor stores, that tells me they are being successful so far,” said supermarket industry consultant David Livingston, president of Pewaukee, Wis.-based DJL Research. This is especially significant in the case of Publix, he says, because it is a company known to take its time refining new concepts.

The two existing Publix Sabors already outperform the regular Publix stores that occupied the sites, says María Brous, a Publix spokeswoman.

One of the new stores will occupy a remodeled Publix supermarket in Miami’s Flager Park area; the site of the second one has yet to be disclosed.

While national grocery chains are stocking more products popular with Hispanics, Publix is the first of the 10 largest traditional supermarket chains to roll out a Hispanocentric-format supermarket. Florida-based Publix is the largest employee-owned retail chain in the U.S., with 641 supermarkets in Florida, 161 in Georgia, 37 in South Carolina, 25 in Alabama and 11 in Tennessee.

The purchasing power of Hispanics is expected to reach $1 trillion by 2010 as the group continues to grow at a faster pace than any other ethnic group, according to a 2005 Food Marketing Institute report. Hispanics comprise 13 percent of the U.S. population, and that rises to 16.8 percent in the Sunshine State.

Also helping sales of ethnic foods has been the spicing up of the palates of U.S. consumers in general. Some $75 billion worth of ethnic food is sold per year in the U.S., amounting to $1 out of every $7 spent on groceries, according to the Agricultural Marketing Resource Center, in Ames, Iowa.

In Florida Publix has long included grocery items catering to the local population in its regular stores serving significant Hispanic populations, says Brous. But space constraints limited the variety and number of categories it could carry. At a regular Publix store, for instance, beans take up a 4-foot-wide section, but at Publix Sabor they are 12 feet wide to accommodate chick peas, pigeon peas, pinto beans and other varieties.

“It was about creating a shopping environment where the products were geared more to our Caribbean and Hispanic consumers, but not necessarily exclusive only to Hispanics,” said Brous. (A little over half of Publix Sabor customers are Hispanic.) “A non-Hispanic person can still go to a store and find very normal, day-to-day items they typically purchase.”

The environment within a Publix Sabor store is very different from a regular Publix supermarket. The stores have salsa and merengue music piped in, and they feature bright colors, ceramic tiles and wrought iron. The shelf signs are written in English with the Spanish translation below. All employees are bilingual, and the store advertising is in both languages.

Publix Sabor’s extended produce department contains an array of such root vegetables as yucca, yautia and ñame, and such popular Hispanic herbs as recao, cilantrillo and sofrito, a food seasoning.

The meat counter is peppered with hard-to-find Hispanic favored cuts: pig feet, tripe, cow tongue, neck bone, grouper head and roasted pork. Weekly specials frequently include items popular among Hispanics: beans, 20-pound bags of rice and 3-liter olive oil bottles.

The deli sells ready-to-eat food with a rotating selection of favorites, including rice, beans and ripe plantains. A tropical juice bar serves a dozen selections of fresh juice.

The 61,000-square-foot Hialeah store — 21,000 square feet bigger than its sister up north — also has a hair-and-nail salon and in-store boutiques that sell perfume and jewelry.

DJL’s Livingston says Publix has the flexibility to work on new concepts because “they do not have to cater to stockholders and Wall Street.” He also says the company is profitable thanks partly to those hard-working employees who own a piece of the company.

In contrast, Florida’s two other main supermarket chains, Winn-Dixie and Albertsons, face challenges — the first filed for bankruptcy reorganization last year, and Albertsons was recently sold.

It is too early to say how many new Publix Sabor stores will be built since Sabor is still at a pilot stage, says Brous. “We want to make those two stores the best experience, and then we will go from there,” she said.

Publix Sabor’s chief competitors are two independent grocery chains that cater to Hispanics: Bravo Supermarkets, in Orlando, and Sedanos Supermarkets, which has more than 34 stores in south Florida.

Independent Hispanic-oriented supermarkets such as these are giving the national chains a run for their money, says Terry Soto, CEO of About Marketing Solutions, a Burbank, Calif.-based market consulting firm. “I was in a Publix Sabor last November and saw for myself how well the chain had executed both its assortment and merchandising, with an eye towards the various nationalities that now live in Miami,” said Soto. “Others that are doing a phenomenal job are Fiesta Mart and Carnival, in Texas.”

Like other industry observers, Soto says she believes the opportunities for traditional supermarket chains are significant. Even with lower incomes, Hispanics spend more on groceries than the average U.S. consumer: $133 a week versus $92.50, according to the Food Marketing Institute study. This is because Hispanic families are generally larger and eat more often at home.

Little wonder, then, that other regional grocery chains are also going after the Hispanic niche with an extended product line and bilingual advertising, signage and staff. On the West Coast, for instance, Hispanics are big fans of Food 4 Less, a chain of 106 warehouse-style supermarkets that carry a large variety of Hispanic products. (Food 4 Less is a division of Cincinnati-based Kroger Co.)

In 1990 Dallas-based Minyard Food Stores launched Carnival Food Stores, a Hispanic-themed supermarket chain that has since grown to 24 outlets in the Dallas-Fort Worth area. It is so successful that the company plans to convert some of its regular Minyard supermarkets to Carnival Food stores.

For all the growing popularity of Hispanic-themed supermarkets, the niche remains highly fragmented. In major cities like Chicago, Los Angeles and New York, no major chain is favored by the so-called unacculturated Hispanics — those whose primary language is Spanish.

“In Chicago big food retailers like Jewel-Osco barely show up among unacculturated Hispanics,” said David Morse, president and CEO of New American Dimensions, a Los Angeles-based ethnic marketing research firm that conducted a nationwide study on Hispanic shopping habits two years ago. “The number one store for unacculturated Hispanics there [in Chicago] is El Guero, with 11 percent.”

Two exceptions in the study are San Antonio and Miami. About 88 percent of San Antonio’s unacculturated Hispanics shop at HEB, a San Antonio-based chain with 300 stores in Texas and Mexico. In Miami 35 percent of this group favors the Sedano’s Supermarket chain, while 32 percent shops at Publix, Morse says.

In general, Hispanics find it hard to meet their shopping needs at one retailer. Whereas 82 percent of U.S. consumers spend their grocery dollars at one location, generally a grocery store, the corresponding figure for Hispanics is 68 percent, Morse says. Non-Hispanic consumers visit a grocery store seven times a month, but Hispanics go no less than 26 times in search of specific products and the freshest produce, says Morse.

“We have done research for many of the grocery chains that have looked at the market,” said Morse. “But some are cautious, because they do not want to alienate their existing consumer base. A lot of it is misconception, because they think that Hispanics are going to assimilate and acculturate. They are reluctant to change their formats.” Some chains might also be nervous over the fate of Avanza (Spanish for “advance”), a Hispanic-themed supermarket launched three years ago in Chicago and Denver by the Minneapolis-based Nash Finch Co. After two years the company announced it was shutting and selling most of the stores because they were not making money fast enough.

Morse says he believes Nash Finch did everything right, but its short-term financial objectives were too ambitious.

Despite some efforts to market to Hispanics, the supermarket industry’s focus “on efficiency and centralization limits an ability to customize to local consumer needs at a local level,” Soto said. “Retailers that have created Hispanic formats fare much better in this regard, because they are not encumbered as much by the larger organizations’ operational goals and metrics.” Further, she says, smaller Hispanic independents also tend to offer better service than the big chains.

The irony is that, when it’s done right, ethnic food is a relatively safe retail category for companies to invest in, because cuisine is one of the last distinguishing characteristics an assimilating group will drop. “It all comes down to understanding your market and the mix of unacculturated and acculturated people,” said Morse. “A third-generation Hispanic loves his grandmother’s sopa de fideos [noodle soup] and guisado [stew] but also wants to eat pizza, hamburger and even Hamburger Helper. They love their ethnic food, but they also look for the same things as mainstream shoppers.”

They can find it all at their local Publix Sabor.

© 2008 ICSC. All rights reserved. | Terms and Conditions | Privacy Policy | Contact ICSC | ICSC Home |