Walmart Stores Inc. is planning to say hola to a whole new format when it launches two Hispanic-focused supermarkets this summer, according to a statement from Walmart PR and Brand Reputation Manager Amy Wyatt-Moore. Called Supermercado de Walmart, the pilot stores are planned for Phoenix and Houston, in retail spaces previously occupied by Walmart Neighborhood Markets, which are smaller-format stores occupying around 40,000 square feet.
Moore said the stores will feature a "new layout, signing and product assortment designed to make them even more relevant to local Hispanic customers." The staff will speak both English and Spanish. The initiative is part of Walmart’s “store of the community” program, which aims to tailor locations to better serve local shoppers.
The Hispanic population is the fastest growing ethnic group in the U.S., with an estimated 45 million Hispanic/Latino people currently living in the country. According to the U.S. Census Bureau, Hispanic buying power is expected to top $1 trillion by 2011.
Armando Martin, a senior consultant in the grocery/retail category with marketing firm XL Edge, has worked with big-name retailers such as Kmart, SuperValu and Kroger. He is impressed by Walmart’s efforts to reach out to the Hispanic demographic. “I think they’re probably doing the best job out of anybody. I don’t know of any other retailer who is really putting their money where their mouth is.”
Martin pointed to public statements by former Walmart CEO Lee Scott emphasizing their outreach to Hispanic consumers, as well as the vision of another former CEO and current vice chairman, Eduardo Castro-Wright. “It was under [Castro-Wright’s] leadership that this happened,” Martin said. “This is his brainchild. He is a good executive and he knows the business.”
Martin said diversity on the executive level at Walmart is a strong sign that they will be successful in reaching out to specific ethnic communities. “A lot of companies say they believe in diversity, but then they’ll point to their warehouse or the stockroom,” Martin said.
Walmart declined to comment on what place natural and organic foods will have in the new Supermercado stores, but according to research by the Natural Marketing Institute, Hispanic consumers are significantly more interested in natural and organic products than the general population and spend more than the average consumer on healthy, organic and natural products.
“[Hispanic consumers] are the poster child for natural, fresh food,” Martin said. “They’re shopping three to four times a week. They want fresh produce. They are cooking at home, not microwaving. It’s not all tacos and grease. It’s fresh salads, juices—aguas, licuados.”
“I can’t speak specifically to a demand for certified organic foods,” Martin said. “But healthy foods, foods that are good for you, are becoming more and more important to them.”
At the recent Nutracon conference in Anaheim, Calif., Dr. Cesar Diaz, a family practitioner from the Salt Lake City area, spoke to the fact that the Hispanic community is being underserved by the natural and organic industry.
“The whole health industry has totally ignored this community,” Diaz said. “There are 45 million Hispanics in the U.S. Many of them are middle class, well educated. A lot of them purchase organic food.”
Diaz hopes that Walmart won’t overlook this fact with their Supermercado stores. “We all know organic is more expensive,” Diaz said. “Walmart should use their power with the agricultural industry to lower the cost of organics, not just for Hispanic consumers, but for everyone.”