(June 7) The decision by Nash Finch Co., Edina, Minn., to close or sell six Hispanic-format stores can be blamed on Nash Finch, experts say — not on the format. The outlook for Hispanic-themed supermarkets remains bright.

The produce industry hopes they’re right. Hispanics spend about 47% more than non-Hispanics on fresh fruits and vegetables, according to the Food Marketing Institute, Washington, D.C.

About 97% of Hispanics rank high-quality fruits and vegetables as the No. 1 reason they choose a grocery store.

And those customers will keep on coming. The Hispanic population in the U.S. grew by 58% in the ‘90s, to 35.3 million, and is expected to reach 55.1 million by 2020.

In May, Nash Finch announced it would close three Hispanic-format Avanza markets in Illinois and Colorado and try to sell its other three Avanzas, all in Denver. The company also will close 15 traditional grocery stores.

Nash Finch opened its first Avanza in May 2002 in Denver. The store stocks about 2,400 Hispanic specialty food products, including fresh fruits and vegetables.


“I think the problem with Avanza was that they had a good concept, but they didn’t know to execute it at store level,” said Allen Lydick, a consultant with Mexigrocers.com, Raleigh, N.C. “Hispanic format stores are doing well in other markets.”

From what Lydick heard through the industry grapevine, Avanza’s prices were too high and its stores too clean or sterile. But if a Hispanic-format store is done right, he said, it can be a big success.

He predicted an increase in the number of such stores in places like Atlanta, Florida and North Carolina.

Among the chains, Albertson’s Hispanic-themed Super Saver stores feature bilingual staff and signs and mer-chandise imported from south of the border. Three Super Savers opened in Los Angeles in 2002 and one in San Diego in 2003. The Kroger Co.’s Food4Less Hispanic-themed stores also have done well in Southern California.


If Hispanic-format retailers do their homework, they should thrive, said Dick Spezzano, president of Spezzano Consulting Services, Monrovia, Calif.

If, for instance, a chain opens an Hispanic-format spinoff, the parent company has to let its offspring do its own thing — a separate group of managers, Spezzano said, is critical.

One thing is clear about the Hispanic mind-set: the more fresh fruits and vegetables, the better. The produce and meat departments in bodegas and other Hispanic-format grocery stores make up about 42% of all store stock-keeping units, twice the share of many conventional retailers, Spezzano said.

Jim Hertel, senior vice president of Willard Bishop Consulting, Barrington, Ill., agreed that retailers catering to Hispanics need to keep their ears close to the ground to be successful. They need to know, for instance, the neigh-borhoods they’re moving into: Differences between a neighborhood of mostly first-generation Hispanic-Americans and one of more acculturated Hispanic-Americans can be critical.

Community involvement is a must.

Hertel knows a retailer in the Southwest who has built a wedding hall and community meeting place for the predominantly Hispanic community he does business in.

He’s also heavily involved in the local schools.