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Retail Industry

Study sheds light on Latino shopper preferences

DSN Retailing Today, June 27, 2005

Targeting the Hispanic food shopper today requires keen insight into the unique cultural and taste preferences of this large and growing ethnic segment--especially considering that Hispanics spend 46% more than the typical American consumer on groceries.

But determining the appropriate mix of products and services isn't a perfect science. The Hispanic shopper's country of origin and the level of American acculturation lead to differing taste preferences and service demands, making it incumbent upon the retailer to learn as much as possible about specific Hispanic shopper groups.

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On a broader scale, however, studies of Hispanic grocery shopping habits reveal data helpful to retailers. One such study released in May by the Food Marketing Institute, "El Mercado 2005," sheds light on Hispanic shopper preferences, including store attributes important to this group regardless of regional differences or level of acculturation.

"Hispanics shop 26 times a month for food on average. The desire for freshness is driving that. Rather than stockpiling foods for the week, many shop for and prefer foods on a daily basis," said Thomas Tseng, principal of New American Dimensions, a multiethnic consulting firm that conducted the FMI study with print advertising services company Advo.

Tseng outlined key findings from the El Mercado report at an FMI Show seminar in May. The study was based on 1,650 phone interviews of Hispanic grocery shoppers living in the top 10 U.S. Hispanic metropolitan markets, where 60% of American Hispanics live.

Among findings was the fact that Hispanic households spend an average of $133 per week on groceries--significantly higher than $91 spent by a typical non-Hispanic family. This is due in part to the fact that Hispanics generally have larger families and also tend to eat out less than non-Hispanic households. Preparation of authentic Hispanic meals is important for most Hispanic and is tied to values emphasizing family and heritage.

As opposed to industry food trends promoting convenience meal solutions demanded by Anglos, Hispanics generally shun such products, preferring in most cases to cook from scratch. For this reason, freshness is one of the most important features sought by the Hispanic food shopper, especially in perishable categories such as produce, meat and bakery.

"The importance of produce cannot be overemphasized," said Terry Soto, president of About Marketing Solutions during the same FMI session on ethnic marketing.

Grocery stores that are clean, have courteous employees and emphasize fresh produce, meat and poultry are store features most important to Hispanics, the FMI report revealed. While these traits are also the top features desired by the general population, for Hispanics the weight given these attribute is much higher, all with 90% or more naming these features as somewhat or very important versus responses in the 70% range for all shoppers. Further, Hispanic shoppers also value stores that recognize their culture by offering authentic Hispanic products, bilingual packaging and Spanish-speaking employees. Low prices are another priority, with 96% of those surveyed rating this important.

For those less acculturated, demand for authentic Hispanic foods and bilingual employees and signage is especially high, rated as important by 90% or more of those surveyed. Even among English-speaking Hispanics, these elements are a priority, with 55% to 80% of acculturated Hispanics naming bilingual features and Hispanic products as important.

Other survey results showed that 62% of Hispanic shoppers rely on direct-mail grocery fliers to plan their shopping trips. Reliance on circulars is much lower for the general population, according to FMI, used by only about 38% of mainstream food shoppers. Coupon usage, in contrast, is much lower among Hispanics than the general public.

Another interesting finding from the study is that Hispanics are much more likely to shop multiple channels for food than the general public. While a supermarket is the primary store for 94% of Hispanics, more than half of respondents also visit discount superstores, drug stores and ethnic food stores such as bodegas, carnicerias and panderias monthly. Warehouse stores also rated high, visited monthly by 46% of Hispanic shoppers.

Variances are found based on level of acculturation. Recent immigrants shop at ethnic stores five times more than acculturated Hispanics, for example, while the acculturated group is more likely to take advantage of convenience channels such as drug chains and convenience stores.

The important takeaway for retailers is that Hispanics obviously are not finding all of their food choices satisfied at their primary store, which in most cases is a supermarket. The drive for variety and authenticity in Hispanic foods and a desire for low prices are pulling Hispanic consumers in multiple directions--a survey finding that should put retailers of all types on notice to learn more about this group's food preferences.

Retail Industry

Study sheds light on Latino shopper preferences

DSN Retailing Today, June 27, 2005

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