Pan dulce and fresh tortillas: Coming soon to a Wal-Mart Supermercado near you
The second Supermercado de Walmart opened this month in Phoenix (the first debuted in Houston in May). This isn't a giant supercenter, but a traditional size grocery store with products specifically tailored to Hispanic shoppers.
I expect there will be a lot of chatter about how the retailer is either pandering to a minority customer base or angling to put yet another group of independent retailers out of business. But really, this is just good business.
Tailoring a business to a growing and lucrative consumer group is a hardly new to retailers. The successful ones have been marketing and selling to Hispanics for ages. A decade ago, I wrote a feature story on the subject where academics and consultants all named Sears a retailer doing this right. A lot has happened to Sears since then, but its troubles stem more from missteps in managing other core businesses like appliances than reaching out to Hispanics. But I digress.
If Wal-Mart's Supermercado succeeds, of course it will pose a threat to similar grocery stores. It won't be much different from what happened to general merchants and category specialists that fell prey to Wal-Mart's lower discount store prices. Or the office supply outlets that can't compete with Sam's Club.
Anyone who doubts Wal-Mart's ability to reach this customer base should think again. The retailer already operates roughly 500 stores in largely Hispanic communities and has learned a lot. Each manager has some leeway to tailor product selection to local needs, another knowledge base for the company. And Wal-Mart operates more than 1,250 stores in Mexico, including similar-sized supermarkets. Walmex retail operations outperformed Mexico's overall retail market by more than 50%, according to the company.
And, before everyone rushes to accuse Wal-Mart of pandering, think long and hard on this. Any large retailer, or business for that matter, that doesn't have a plan to reach the Hispanic market is one that will be gone, sooner or later.