News Column

Competition Among Hispanic Grocery Stores Grows

September 30, 2012

Brian Ianieri

Grocery

Hispanic food markets have long been a part of the business landscape in southern New Jersey, offering produce, cuisine and spices in aisles of often small, family-owned stores.

So when the Hispanic population boomed in the past decade, Hispanic entrepreneurs were ready to cater to that growing customer base.

But so were supermarket chains and major retailers. And then the prolonged economic slump challenged just about every type of business.

"I see many stores that are trying to open up, go in business for six months and go out of business. The economy is really tough, and there's a lot of competition," said Jose Marin, 44, owner of La Cosecha grocery store in Pleasantville.

Marin, of Atlantic City, is one of the local Hispanic business people who responded to the growing market by expanding and appealing to a wider customer base by offering more options.

Marin and his wife, Martha, opened their $5 million, 11,400-square-foot grocery store on Main Street in Pleasantville last year, moving to a building nearly four times larger than their previous market across the street.

Marin opened his first Hispanic market in Atlantic City nearly 15 years ago while he was working as a blackjack dealer.

He remembers a time when he drove his own merchandise from New York because he could not find suppliers willing to deliver to such a small market, he said.

That has since changed. Competition has also grown.

"If you do good selling potatoes, everybody's going to sell potatoes, too. Many people try to compete, but once they get into the business, they find out it's not easy," he said.

Marin estimates nearly half of his clients are Hispanic, and he stocks products that appeal to other ethnic groups, races and cultures.

"I cannot concentrate just on the Spanish people to make my business. I wouldn't be able to make it. You have to appeal to everybody," he said.

The increasing Hispanic population and its growing buying power means big money for companies trying to capture some of the market, according to research firm IBIS World.

The buying power of Hispanics should grow to $1.6 trillion in 2016, much faster than the nation as a whole, it says.

Buying power is disposable income available for spending after taxes. Hispanic spending at supermarkets and grocery stores will account for nearly $70 billion in four years, IBIS World estimates.

Groceries are a major parts of spending patterns -- as an example, IBIS World research suggests the average Hispanic spends nearly 38 percent more on eggs annually than a non-Hispanic.

Growth in Hispanic buying power tops that of other racial and ethnic groups, according to the Selig Center for Economic Growth at the University of Georgia. New Jersey had the sixth-largest Hispanic market in the country.

"Hispanics are fast becoming preeminent drivers of growth and likely trend setters in the marketplace," according to global research firm Nielson.

Major companies -- such as Coca-Cola, Wal-Mart, General Mills and Procter & Gamble -- have targeted the Latino population as crucial for growth, Nielson said in a recent report on the Hispanic market.

Some local businesses have been growing too.

Lilibeth Estrada, 25, of Hammonton, manages El Paso Food Market in Hammonton, a business owned by her parents.

They opened the food store in December, after having owned another, smaller location in Hammonton for nearly 16 years, she said.

Estrada said the market once had more of a focus on jewelry, western apparel and other products but put more emphasis on groceries when the new store opened.

"As the economy went downhill, that just stopped selling. People were more concerned about buying something to eat than buying jewelry," she said.

The six-aisle store has wide walkways for shoppers to pick out plantain chips, bay leaves, oregano, chiles, pineapples, tomatoes, guava candy bars, sausages and meats, and other items.

The business has a deli and also maintains a bilingual Facebook page, touting its produce, hand-made pinatas, homemade posole, and line of Mexican-style bread.

Estrada, who graduated from the Richard Stockton College of New Jersey in December with a degree in accounting, has also seen more Hispanic products being offered in more stores.

Her family business stocks products to appeal to different Hispanic cultures, and started offering catering and cakes for parties, she said.

'We try to attract people with something different," she said.

In southern New Jersey, the Hispanic population has grown significantly in a decade, much more than the population as a whole.

In Atlantic County, for example, Hispanics made up 17 percent of the population in the 2010 U.S. Census. A decade earlier, they made up only 12 percent.

In Cumberland County, Hispanics now account for nearly 27 percent of the population, compared to 19 percent in 2000.

Marin said the tenets of running a grocery store in the region hold true regardless of size -- being in a good location, offering quality products at competitive prices, having good employees and a hands-on management style.

His store makes it a point to only offer items he knows will sell. He stays away from more gourmet-style, high-priced products.

"In order to stay in business, you have to be really fair about prices," he said. "People are looking for bargains."



Source: (c)2012 The Press of Atlantic City (Pleasantville, N.J.) Distributed by MCT Information Services


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