The plot thickens in the Hispanic marketing game: ethnocentric food retailers make inroads by emulating old-country assortments

DSN Retailing Today, Sept 6, 2004 by Debbie Howell

Targeting the Hispanic consumer has become one of the biggest trends in food retailing this decade, with efforts ranging from adding neighborhood-targeted ethnic merchandising at wide-reaching stores to developing formats catering to Latinos specifically.

Each new format launched raises the bar in ethnic merchandising, with one such concept, recently opened in North Texas, making a major play for Hispanic consumers. Texas-based Brookshire Grocery Co., which operates 154 supermarkets in Texas, Louisiana, Arkansas and Mississippi, debuted its prototype Ole Foods Store Aug. 18 in Corsicana, a city of 25,000 residents 53 miles south of Dallas.

The 42,000-square-foot store is actually the second Ole Foods, refined from a test store in Piano, Texas, that opened in November 200l. Brookshire spent the past two and a half years perfecting the format before deciding to expand and plans to open one or two more units during the fiscal year that begins in November.

"Our primary target customer is Hispanic, but we hope to attract everyone," said Roger Story, vp of merchandising at Ole Foods. "We are confident, even with competition being as stiff as it is, that we can carve out our own niche and be successful."

Ole Foods indeed faces tough competition in the Dallas market. Two Hispanic-targeted food chains have been in the area for years, Texas-based Fiesta and Carnival, a division of Minyard Food Stores of Texas. Both are in nearby Piano, but not Corsicana. In Corsicana, Ole Foods will compete against two smaller Hispanic food stores, La Michocanna and Supermercado Mi Tierra, along with a Wal-Mart Supercenter and HEB grocery store, both of which offer some Hispanic-targeted food items.

About 20% of the population in Navarro County, where Corsicana is located, is Hispanic, primarily of Mexican descent. In targeting this consumer group, the merchandise, services and even look of the store are all unique compared to a typical Brookshire's grocery store or its price-impact Super 1 Foods format.

Besides an extensive assortment of imported and preferred Hispanic foods, fresh departments are the store's showpiece. Nearly everything in the bakery is made from scratch, including cakes, pastries and tortillas. Produce drills down deep into Hispanic preferences, featuring large quantities of key items and unique ingredients such as jicama root, tunas (prickly pear) and banana leaves. The fresh seafood counter offers more whole fish, including tanks for live tilapia, lobster and catfish. The meat section also caters to Hispanic tastes, with several varieties of marinated fajita meat and chorizo for sale.

Other features of Ole Foods include a Restaurante that serves hot entrees such as tacos, tamales and barbacoa, a dell featuring authentic Mexican meats and cheeses and a pharmacy with a drive-through window. Services of interest to Hispanic shoppers are available, such as check cashing and money order sales. The store will also sport a leased-jewelry department and sell items outside on a veranda.

Brookshire took great care to get the merchandise mix right, offering extensive imported brands and creating the extra space for key national labels that Hispanics prefer. Not surprisingly, signage throughout the store is bilingual.

The color scheme of the store is definitely atypical for a supermarket, with bright orange, yellow, green and purple adorning walls and signage. Story said the idea was to create a "festival" atmosphere that is typical of food stores in Mexico.