Economy doesn't stop Hispanic retailers

Economy doesn’t stop Hispanic retailers

TUCSON, Ariz. – Two major retail chains looking to cash in on Spanish speakers are opening stores in Tucson – demonstrating the growing buying power of Hispanics, even during tough economic times.

El Super, a Los Angeles-based grocer, and La Curacao, an electronics and appliance retailer that styles its stores to resemble Mayan and Aztec pyramids, are setting up at the Southgate Shopping Center.

El Super, owned by privately held Bodega Latina Corp., had its grand opening Wednesday, said its president and CEO, Carlos Smith.

La Curacao, also L.A.-based, plans to open by August.
Both Hispanic retailers target consumers who are most comfortable doing business in Spanish. Same plaza no coincidence.  Hispanic consumers have large families and strong social networks, Garcia said. They spend more money at grocery stores, but they’re drawn more toward staples than prepackaged foods, he said.
They are also looking to stretch every dollar.

“They’re very vulnerable to the recession, but their social structure allows them to survive,” Garcia said.

And their numbers are growing.

Pima County’s share of residents who say they are Hispanic rose from 29.3 percent in 2000 to more than 33 percent now, the U.S. Census Bureau says. The rate of change could soon accelerate, as many Hispanics are younger than 5, the data show.

The Hispanic population has emerged as a powerful force among retailers because it’s young, said Maricela Solis de Kester, president of the Tucson Hispanic Chamber of Commerce.

Hispanics, like all other segments of the population, have cut back on discretionary spending, but young families still need groceries, she said.

“We have to spend the money, especially on the very basics and necessities, compared to non-Hispanic communities whose children are older and out of the house,” de Kester said. “It’s a different purchase power.”

Now is the right time for any business – whether or not it targets Spanish speakers – to expand if it has the financial backing to do so, said Greg Furrier, a principal with Picor Commercial Real Estate Services in Tucson.  Rents are low and property owners are willing to offer lucrative deals to entice tenants to commercial developments, he said.

Even businesses that target the growing demographic aren’t immune to the recession, however. La Curacao pushed back its opening to weather the rough economy, said Nancy McClure, a first vice president with CB Richard Ellis in Tucson. The company had originally announced a fall 2008 opening.

McClure, who brokered the Southgate deal for La Curacao, said the company began the process of moving to Tucson more than two years ago and selected Southgate – though it was quite run down at the time – because it’s in the heart of the Hispanic community.

El Super made the decision to move to Tucson before the recession, said Smith, and the economic turbulence wasn’t going to stop those plans. Bodega Latina has 15 locations in California and one in Phoenix. The company has plans to expand in Arizona, California and Nevada through the next year.

“El Super’s primary target market is the Hispanic consumer,” Smith said in an e-mail. “And similar to the Phoenix market, we believe the Tucson market presents an opportunity for us, given its demographic composition.”

All signage in the store is in Spanish and English. The company has already hired the 130 to 140 employees needed to staff the store, Smith said. For its storefront, El Super razed an existing building at Southgate, which had fallen into disrepair, and started from the ground up. The center has undergone a $41 million renovation to attract new tenants. Now, a bbb! Fashion store is at the center and _ in addition to La Curacao – Subway, Oasis Insurance and On Net Wireless have signed deals to move in, said Dave Hammack, a senior associate with Volk Co.

The supermarket’s opening is welcome news for Spanish-speaking consumers looking for Mexican products. Although they are bilingual, Juan and Margarita Cisneros said they feel more comfortable being assisted in Spanish.

“This is what we needed. We shop for groceries almost every day and it’s better if it is in Spanish,” Juan Cisneros said. “We interact better with Spanish-speaking employees at the store. It is part of our roots.”

The couple, who shop at Food City regularly, said the opening of El Super is good because it will increase competition and, they hope, drive down prices.

“When they opened in Phoenix, it affected all the stores in that area,” said Edgar Cuevas, who works with both stores as a wholesale distributor in Tucson for Mojave Foods. “When people hear about a new place like El Super that is targeting people with fresh food and products, people just go.”

For many, the store’s name is a household word. “El Super” in Spanish is a general phrase for supermarket, and Bodega Latina capitalized on that when selecting the name.

“My mom never said, ‘Let’s go to Bashas’, let’s go to Costco,’ or something like that,” Cuevas said. “She used to say, ‘Let’s go to El Super.’ “

Bashas’ Inc., which owns Food City, doesn’t comment on its competition, company spokeswoman Kristy Nied said.

But she did acknowledge that both stores share the same demographic. “Our core customer for Food City is Hispanic families,” she said.

With the downturn in the economy and more families looking for bargain prices, Food City has ratcheted up its marketing toward English speakers, too.

“It’s been a solid niche for us in terms of serving the needs of the community,” she said.

De Kester, of the Hispanic Chamber of Commerce, also downplayed the impact El Super will have on local grocers, including carniceria meat markets. If Hispanic families love a certain place, she said, they’ll keep going.

“As a population,” she said, “we tend to be very loyal.”
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Source: Associated Press (May 24th, 2009 @ 10:40am)
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