Dive Brief:
- Northgate Gonzalez Market opened a new store location in Riverside, California, this week, according to a press release, featuring a community room that serves as a meeting space for nonprofits, as well classes for things like cooking and yoga.
- The store will feature the brand's standard departments including a tortilleria, fresh produce, meat department and large selection of domestic and imported Latin American offerings.
- Cardenas Markets announced plans to expand into Orange and Los Angeles Counties next year, according to The Press-Enterprise. It will begin by opening in a former Stater Bros. location in Whittier. The grocer has already opened new California locations in Victorville and Concord, as well as stores in Tucson, Arizona and Las Vegas this year. It plans to open one in Montclair, California next year.
Dive Insight:
While rooted in different strategies, the decision by both Northgate and Cardenas Market to expand hinges on the growing contingent of Hispanics in Southern California seeking brands that reflect their cultural heritage.
Northgate, which was founded in 1980, appears to be focused on deepening its customer base in Southern California. In addition to the new Riverside store that caters to the Hispanic population with its expansive Latin American food selection, the grocer launched a targeted marketing campaign earlier this year during the Billboard Latin Music Awards featuring an emphasis on its authentic and freshly prepared food options. Items included pan dulce, chips and salsa and its guacamole station.
Cardenas Markets, on the other hand, is a relatively new player in the Hispanic grocer space, forming around 2017 through the merger of 31 Cardenas store locations and 15 Mi Pueblo store locations. The union gave the new banner substantial coverage throughout California and into Las Vegas. Cardenas' strategy is growth-focused. It quickly purchased seven Los Altos Ranch Market stores from Northgate in Arizona to stake out more territory in its eastward push. Northgate reportedly sold the locations so that it can focus on the Southern California region.
There are a few other Hispanic grocers to contend within the Southern California region including H-E-B's Mi Tienda and Southeastern Grocers' Fresco Y Mas, which have also expanded in recent years. Albertsons also operates its Amigos United banner. Hispanic market Superior Grocers is also focused on building its customer base throughout Southern California.
Recent research concluded, however, that mainstream brands are doing a poor job of marketing to U.S.-born Hispanics, giving Hispanic retailers like Northgate and Cardenas an advantage as they expand. The Hispanic population in the U.S. overall is set to double over the next 40 years, giving a major incentive to ethnic grocers to expand their footprints to match.
California, in particular, offers a sizable market opportunity for Hispanic grocers as Latinos make up the largest ethnic demographic in California at about 39% according to the U.S. Census Bureau. Orange and Los Angeles County are home to many Hispanic residents as well, with the demographic representing 34% and 48% respectively, according to Pew Hispanic.
