Food retailers need to go ‘all-in’ with Hispanic consumers
The fastest-growing population in the country over the next forty years will be Hispanic, according to the U.S. Census Bureau. There are already 75 million residents of Hispanic heritage — one in five people in the U.S. Hispanics are great food consumers, buying about five percent more than the average shopper, and they are becoming more mobile and digitally proficient, with 95 percent owning smartphones.
All of this adds up to a huge opportunity for supermarkets, according to a panel at FMI’s Midwinter Conference. This opportunity requires discipline to understand the unique buying behaviors of the Hispanic consumer and is not without risk for retailers. The reward, according to Mark Baum, chief collaboration officer & senior vice president, Industry Relations at FMI, and moderator of the panel, is well worth the effort for any operator with a potential Hispanic shopper base.
“Hispanic shoppers’ buying power is expected to be $24 billion by 2025,” said Mr. Baum. “With larger households that often include older adult relatives, Hispanic families’ weekly grocery spend is about $20 above average; they favor supermarkets as their primary store.”
Understanding the differences among Hispanic subcultures is critically important to successfully entering into or expanding marketing efforts to the sector, said Oscar Gonzalez, co-president, Northgate Gonzalez Market, a 41-store chain in California. “Mexicans don’t want to be treated like Salvadorans, and Salvadorans don’t want to be treated like Mexicans,” he said.
Both Mr. Gonzalez and Omar G. Jorge Peña, chairman of Aurora Grocery Group, a 24-store chain operating in five eastern states, agree that authenticity is also crucial for success. “Hispanic shoppers can quickly figure out if a retailer is faking it. They want the real thing, and that doesn’t mean just one store associate who speaks Spanish,” said Jorge Peña. Retailers also need to show they are “a committed partner to the community. If you’re not all-in, don’t even attempt it.”
DISCUSSION QUESTION: How effective have U.S. grocers been in catering to the wide variety of consumers that are grouped within the Hispanic demographic? How can grocery retailers best deploy marketing and merchandising tactics to capture a greater share of wallet from this growing community?