News Column

Specialty Shops

June 2005, HISPANIC BUSINESS Magazine

Keith Rosenblum

shopper

Venezuelan shoppers at Sedano's Supermarket in Miami experience a pleasant surprise when they find arepas, the grilled cornmeal pockets filled with meat and cheese. Mexicans can buy bolillos, the light round buns. "What Cubans like is not necessarily what Peruvians like. What Mexicans like is not necessarily what Guatemalans like," says President Agustin "Tino" Herran. "Our task is to figure out who likes what and how to get it on our shelves."

This specialty marketing approach yielded the supermarket chain revenues of $382.63 in 2004 to rank number 14 on the Hispanic Business 500. The company has 26 stores and plans to open more both inside and beyond Florida.

"We fight off the Wal-Marts by knowing our markets better," Mr. Herran says. "Others do a model store and plop it down everywhere. We study exactly who is coming in our doors and make plans accordingly."
Navarro Discount Pharmacies, number 24 on the Hispanic Business 500, also succeeds by studying its Hispanic customer base. The company targets heavily Hispanic neighborhoods, and CEO Jose Navarro estimates three quarters of the shoppers speak Spanish. A specialized product selection assures growth for the future; the chain has 19 outlets and plans to open two or three more each year.

The stores range from 9,000 to 32,000 square feet and include coffee counters, fragrance centers, and grocery sections. "The president of Walgreen's said that when people go into a Walgreen's, they generally come out with one or two items. When they go into Navarro's, they come out with a shopping cart full," Mr. Navarro says.

El Dorado Furniture, number 39 on the Hispanic Business 500, has eight stores including El Dorado Boulevard, an immense showroom centered around a "main street" with building facades modeled on an old city. The street has 22 shops offering economy to high-end furniture. The 110,000-square-foot facility dwarfs traditional furniture stores, which average 20,000 square feet or less.

Like Sedano's and Navarro's, El Dorado reflects the ethnic heritage of its founder. CEO Manuel Capo owned a successful furniture store in Cuba before leaving in 1959. Today, Mr. Capo celebrates his heritage on weekends when El Dorado Boulevard fills with Latin music, wine tasting, raffles, and food. Salespeople stay in the background until a customer needs assistance.

The U.S. retail sector grew 5.2 percent in 2004, according to the Commerce Department. A report from real estate brokerage firm Marcus & Millichap predicts high per capita retail sales in South Florida for this year. "It is a good time to be an owner of a Miami-area shopping center," says Gene Berman, regional manager of Marcus & Millichap's South Florida operations.

Outside of Florida, large Hispanic retailers take a more mainstream approach. Texas-based CG Management, number 59 on the 500, operates Burger King, Golden Corral, and Popeyes franchise restaurants in the Dallas area. CEO Guillermo Perales recently added Manchu Wok, a Chinese fast-food outlet, to his portfolio.

Even in Florida, where retail success has come from Latin Americans, the future may hinge on attracting a more mainstream clientele. "Only 5 to 10 percent of our clients are white or black," says Sedano's Mr. Herran. "People's tastes are changing and this crossover [non-Hispanic] crowd has tremendous potential."



Source: HISPANIC BUSINESS Magazine


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