Dive Brief:

• Heritage Grocers Group has acquired Texas-based supermarket chain El Rancho Supermercado, a spokesperson for the ethnic grocery store company confirmed by email on Wednesday.
• El Rancho Supermercado, which operates 28 stores in Texas and Kansas, will continue to run under its existing name, and its employees will be “warmly welcomed into the Heritage Grocers Group family,” the spokesperson said.
• The transaction brings the Hispanic-focused chain under common ownership with Cardenas Markets and Tony's Fresh Market.

Dive Insight:

Heritage Grocers Group's move to absorb El Rancho Supermercado continues an effort by Heritage to expand its presence in the specialty grocery arena.

The acquisition “aligns with our growth strategy,” the spokesperson said. “The team at El Rancho Supermercado has built a strong brand and long-standing relationship with its customers, and by leveraging our collective strengths, El Rancho Supermercado can deliver even greater value to its loyal customers.”

Financial terms of the deal were not disclosed.

The combination of El Rancho Supermercado under the same umbrella as Cardenas Markets and Tony’s Fresh Market continues a consolidation process that started in April 2022, when Apollo Funds, a group of investment funds managed by affiliates of private equity firm Apollo Global Management, bought Tony’s. Based in Chicago, Tony’s sells an assortment of goods including fresh produce, prepared foods and multicultural items.

In June 2022, Apollo said that funds managed by its affiliates had agreed to acquire Cardenas, which runs stores in California, Nevada and Arizona. Days before disclosing that it was becoming part of Apollo, Cardenas revealed that it intended to purchase six Rio Ranch Market supermarkets in a bid to expand its presence in Southern California.

According to Heritage’s website, the company, based in Ontario, California, currently operates 57 stores under the Cardenas Market brand, 20 Tony’s Fresh Market locations and seven stores sporting the Los Altos Ranch Market banner.

Specialty grocers have recently been doing well even as the grocery industry has dealt with economic headwinds, according to data Placer.ai published earlier in June.

Between May 2022 and April 2023, monthly visits to stores under the Cardenas Markets and El Rancho Supermercado banners, along with El Super, Vallarta Supermarket, Fiesta Mart and Northgate Gonzalez Markets, were consistently above levels recorded during the previous year even as visits to stores across the broader grocery sector were down nearly every month, Placer.ai found.