Retail experts, landlords and brokers, including Coreland’s Matt Hammond, who work closely with some of these tenants told Bisnow that the customer bases are evolving.
By Bianca Barragán | October 29, 2023 | As published by BISNOW
On the hunt for the freshest sushi-grade fish, the puffiest pita or the spiciest Thai peppers, a growing group of authenticity-seeking home cooks is driving demand for ethnic grocers to expand into parts of Southern California where they have never been before.
And in some cases, they’re taking up big-box space vacated by legacy grocers as the industry’s major players shrink through mergers and acquisitions that can result in higher prices and less variety for consumers.
“The general population is more diverse and open-minded in their thinking,” JLL Senior Vice President Ken Shishido said. “There are some areas where your normal English-speaking population wouldn’t think about going into a Hispanic market or an Asian market. And now, we’re all looking for the best food.” Retail experts, landlords and brokers who work closely with some of these tenants told Bisnow that their customer bases are evolving. As customers of once-niche ethnic markets grow to include immigrants, their children and additional generations of their families, consumers who aren’t members of these ethnic groups are also becoming customers.
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…But the stores can also represent movement into new territory. Aliso Viejo and Tustin “are markets that 15 years ago, [ethnic grocers] would have never gone into,” Coreland Cos. principal Matt Hammond said.
Coreland leases and manages over 130 shopping centers in Southern California with a focus on grocery-anchored shopping centers, and its tenants include Latino and Asian markets as well as legacy grocery chains.
“These operators are incredibly sophisticated,” Primestor Development co-founder and CEO Arturo Sneider said, referring to the larger chain ethnic markets. “They themselves are being run by second-, third-, fourth-generation family members, and in the case of Latino grocers and even in Asian grocers, they’re evolving and adapting to the new consumer that is really an American Latino or American Asian customer.”
These chains are still looking for expansion areas where there are substantial populations of the ethnic groups that their products cater to. Experts also said that these stores are attracting increasingly diverse shoppers.
Their expansion could breed more expansion.
As these markets add locations in new areas that were occupied by more traditional legacy tenants, more potential shoppers are beginning to see them as less like a market that is “for” a certain group and more like just a market, Hammond said.
Hammond said he has seen a shift over the last 10 years among mainstream consumers toward both value and authenticity. At Vons or Ralphs, the offerings are very general, Hammond said. In other words, these markets have to offer a wide selection of goods, but that often means not specializing in anything. They will offer tortilla chips and salsa, for example, but they will “typically [be] priced on the higher side” and may not have the authentic feel that shoppers want. But customers at Northgate Market or other markets targeting the Latino population “can get, in their mind, better-quality tortilla chips and salsa at a better price,” Hammond said.