Garcia’s Market opened Thursday in Kerman. And just this spring, Sylmar-based Vallarta Supermarkets opened its fifth store in the central San Joaquin Valley, this one in Tulare.
“I’m sure there’s going to be more,” said Shane Anderson, a Commercial Retail Associates retail broker who helps landlords sign with retailers.
“Several of them we’re talking to have been up touring the Central Valley. It’s a matter of time before they start making deals.”
The interest from Hispanic grocers is far greater than that expressed by conventional grocery stores, he said. Traditional stores, which typically like to locate near new housing tracts, are waiting on the sidelines for building to bounce back, he said.
But Hispanic supermarket chains both big and small are realizing there is money to be made as the Hispanic population explodes.
Hispanics are the majority in the Valley, according to census data released this spring, fueled by a big jump in the under-18 population.
The buying power of Hispanics nationwide is expected to grow by 50% between 2010 and 2015 to $1.5 trillion — a rate that eclipses all other racial and ethnic groups and overall spending growth, according to a yearly study by the Selig Center for Economic Growth at the University of Georgia.
Although many Valley Hispanics have lower incomes than their non-Hispanic counterparts, they spend a greater percentage of their income on food, according to Mintel, a national market research company.
That’s because Hispanics tend to have larger families, said Leylha Ahuile, a Mintel senior analyst.
Rebeca Garcia of Fresno, for example, shops for her family of six at El Super at Tulare and First streets in Fresno. Last week, she left with a cart piled high with food, including canned jalapeños, a large bag of apples and two trays holding 24 eggs each.
All that food will last one week, she said.
“It’s cheaper than other places,” Garcia said of El Super. “They have good specials.”
Anderson, the retail broker, says the Hispanic niche of customers still is underserved in the Valley.
Vallarta has opened stores in Fresno, Porterville and Visalia in recent years, and it opened its first Tulare store in April
. An executive has said that Vallarta plans to open more stores in the Valley. Chief Financial Officer John Marquis declined to comment last week on specific plans for the area.
“The company plans to continue to expand,” he said, noting that there is room for growth of Hispanic supermarkets in the Central Valley.
Kerman’s Garcia’s Market opened in the space Save Mart pulled out of last fall, citing the economy. It’s the Garcia family’s fourth store in the Valley. They also run stores in Modesto, nearby Riverbank and Mendota.
The family is planning to open more stores, possibly including one in Merced County, said Jesus Garcia, owner of the Kerman Garcia’s Market.
“The people in Kerman, they’re waiting for something,” he said, noting that the city has one other supermarket. “They want more options … to do their grocery shopping.”
Other Hispanic grocers, including El Super and Rancho San Miguel, also have established a presence in the Valley.
The stores sell many of the same products as traditional grocery stores, but some departments are vastly different.
Produce sections carry a much larger and varied selection of peppers. They also carry products that aren’t common in traditional supermarkets, including verdolagas, a Mexican parsley, or the Mexican green huazontle.
Meat counters are larger, carrying cuts of meat preferred in Mexico, and deli-style servings of queso fresco cheese.
And the larger supermarkets serve up fresh food like tacos and tamales, along with every flavor of “aguas frescas” drinks, and have large seating areas.
Ethel Rodriguez of Fresno shops at several stores, but buys Mexican sweet bread and canned enchilada sauces at Vallarta at Cedar and Dakota avenues in Fresno.
“They have all that type of stuff, more so than others,” she said.
The stores appeal to non-Hispanic customers, too, like Dianna Mangione of Fresno, who regularly shops the meat counter at El Super.
“It’s not necessarily because it’s Hispanic; it’s because it’s a better quality of meat,” she said.
A shifting marketplace
The Valley has always had a strong Hispanic population, and for years it’s been catered to by small mom-and-pop shops. But now, larger grocers are beginning to take over that role.
Walmart and other more traditional supermarkets also are trying to appeal to Hispanic customers, though on a smaller scale.
There have been some bumps along the way.
The Fiesta Foods Warehouse that opened at Kings Canyon Road and Willow Avenue is now empty and boarded up — but that had more to do with business decisions than a lack of customers.
Ontario-based Fiesta Foods wanted to own a store instead of rent, said Rick Amerine, a retail broker at Commercial West Associates. When the space at First and Tulare streets came up for sale, Fiesta bought it and opened a second store there.
But two Fiesta stores so close to each other was too many in a corridor saturated with grocery stores and a Walmart, Amerine said. The company closed the Kings Canyon store. El Super bought Fiesta and converted the Tulare Street store.
Still, many large companies based in Southern California and the Bay Area are expected to begin growing into the center of the state, Anderson said.
And at least one heavy hitter is in the early stages of finalizing new store locations, Amerine said. He declined to say who, but said the company is “a force to be reckoned with.”