Word: latino
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...with 270 stores and $3 billion in annual sales, is staking its claim north of the border. It operates four stores in the L.A. area and will open four more this year. Gigante (pronounced hee-gan-tay) aims to become the most popular supermarket among California's 11 million Latinos, most of whom hail from Mexico and think of the stores as old friends. The chain's ultimate goal is even more audacious: "To be the leading supermarket in Latino areas across the United States," says Justo Frias, Gigante's head of U.S. operations. "And we have the resources...
There are good reasons for Gigante to think big. Having recently surpassed African Americans (12.7% of Americans) as the biggest minority group in the U.S., Latinos (13%) boast a collective disposable income of $450 billion a year, with much of that money going toward food. Latinos visit grocery stores an average of 4.4 times a week--twice as often as non-Latinos--and Latino households spend one-third more on groceries...
...when people move to a new country," Frias says. That goes for California's big Asian population as well. But supermarkets have been slow to adjust to changing demographics. Traditional chains such as Albertsons, Ralphs and Vons have closed many outlets in low-income neighborhoods while trying to retain Latino and Asian shoppers with token selections of "ethnic" products in their remaining stores. In response, first-and second-generation Asian Americans have flocked to newer chains like 99 Ranch Market, which runs 25 Asian-targeted stores from Orange County, Calif., to Seattle. And many Latinos have turned to family-owned...
...spacious, sparkling showrooms that rival high-end Anglo supermarkets such as Trader Joe's or Whole Foods. "The big chains gave Gigante the opportunity to come in here," says Steven Soto, head of the L.A.-based Mexican-American Grocers Association, a trade group that represents some 18,000 Latino store managers and owners. "The chains didn't understand how to market to our community. But Gigante has done a lot to open their eyes...
Gigante won't provide specific figures, but Frias says, measured in sales per square foot, Latino grocery stores outperform traditional supermarkets by 25% in L.A. neighborhoods where the two go head to head. Indeed, some of the U.S.-based chains are offering Gigante the sincerest flattery by trying to copy its business model. Last year Albertsons, based in Boise, Idaho, the country's second largest supermarket chain, after Kroger, launched an effort to attract Latinos by revamping three slumping Southern California stores in predominantly Latino areas. The company hung Spanish-English signs over the aisles, expanded produce sections 30%, quadrupled...