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Focus on Hispanic tastes makes Sedano's a force in south Florida

by Chip Carter | May 05, 2010
In 1962, the Herrán and Guerra families opened their first grocery store in Miami, offering familiar fare to the ever-increasing influx of Hispanics into south Florida. By the time the company entered the Orlando, FL, market with three new stores earlier this year, Sedano's Supermarkets had grown to become one of the nation's larger Hispanic grocery chains, employing more than 3,000 people.

Despite the focus on Hispanic fare, Sedano's is a perfect example of an American success story. From mom-and-pop beginnings, Sedano's has grown steadily for almost half a century to 34 stores in Miami-Dade, Broward, Palm Beach, Orange and Osceola counties. Newer branches are larger - the three Orlando markets range in size from 58,000 square feet to 65,000 square feet in size - and even older stores are being remodeled and retrofitted to reflect changing tastes and times. Décor is brighter and more colorful, ceilings are higher, and stores are better lit.

The three Orlando locations are the first outside Sedano's south Florida base. Chain manager Pedro Mesa said that the first foray into unfamiliar territory has been surprisingly successful. "We didn't anticipate the kind of success we are having there. We knew we were going to be doing well, but this is amazing - much better than we anticipated. We thought it was going to take more time," Mr. Mesa said. "We've been studying the Orlando market for awhile, and we knew there were a lot of Hispanics there, but we thought it was going to take longer for them to find us."

The new stores opened at the end of January, and the results have been so surprising that the chain is already looking to expand into other markets, Mr. Mesa said.

The reason for that kind of success is simple. While Sedano's honors tradition, it also realizes that today's consumers have a lot of options. They are not simply looking for comfort food from home - they want service, selection and quality as well.

"We've been working for a while trying to get the second-generation shoppers to come into our stores, and it's been happening. We're seeing the younger customers," Mr. Mesa said. "We're trying to stay with the mother, but we're also trying to get that son to come into the store and feel comfortable and have all the products he eats."

These days, more and more that means value-added and ready-to-eat selections as well as bonus features like cafeterias and coffee shops. New and retrofitted Sedano's supermarkets feature prepared foods sections, custom- cut meat departments, diverse Latin and mainstream products, and cafeterias serving espresso and pastelitos.

At a time when other retailers are contracting to avoid shrink, Sedano's has increased the variety of goods it offers. The company does not lump the Hispanic market together in a single group; instead, it micro-markets, offering food from home to immigrants from Puerto Rico, the Caribbean, South America, Central America, Mexico and Cuba.

"Definitely Hispanic products is our niche, but that's not enough. We're trying to get the whole family to go in our stores and be able to get what they want. Customer service is very important also. We want to make sure they have the total experience, the whole package, the products they're looking for and the service they deserve," Mr. Mesa said.

That kind of diversity can make sourcing challenging, especially when it comes to produce. "Each store really pays attention to the neighborhood and who is shopping there. In south Florida, we know exactly who those different groups that live around our area are, so we have a bigger variety of those products," Mr. Mesa said. "In Orlando, we have a huge variety, and we're expanding where we need to expand. Orlando has been a little harder for sourcing, but a lot of the suppliers have been following us in our expansion, so we have the same or more produce items in Orlando than we have in Miami. We have done a good job on that end, and that's one of the reasons people are coming to our stores. We're looking and hearing and making sure that we have what we need to have."

When it comes to produce, "We have a lot of people from Central America, South America, a lot of people from the islands that shop in our stores, so we make a big effort to have all the products they consume regardless of where they come from," Mr. Mesa said. "We intend to have what you ate at home; we intend to have it in the stores, and if you don't find it, we want to know. And if you let us know, we'll make every effort to find it."

Today more than ever, consumers are focused on "getting the most for their money," Mr. Mesa said. And they are shopping more frequently and buying less in each trip. "There has been a change in the pattern of shopping, and we have adjusted to customer needs" by offering frequent specials on staples and bigger packages - sometimes as large as in big-box discount stores - at value pricing.

After 48 successful years in south Florida, Sedano's is not trying to become the next Publix or Kroger overnight. "We're always looking," Mr. Mesa said. "For sure central Florida has been good for us. Tampa is a great area. We're keeping our eyes and ears open."

For now, "Being the size that we are, we're hear what customers need, what they're looking for, and we can react immediately," Mr. Mesa said. "Here the customer talks to the manager and five minutes later it's on the desk of the decision maker. Maybe in the bigger chains it's not that way. We can make those decisions much quicker than other people."