Business Columns & Blogs

Grocers discover ethnic lure

The line of people waiting to get to the counter of Seafood City’s deli runs 30 deep, snaking past the checkout stands that themselves have substantial lines, past the karaoke contest going on at the entrance, nearly to the portal to the rest of Southcenter Mall.

Just outside the entrance is a restaurant with a sign announcing that (paraphrasing here) the largest Japanese fast-food emporium in the Philippines has arrived in the U.S. – and yet another long line.

Diagramming that bit of trans-Pacific business and culinary expansion is the least of the mind-stretching exercises available here, if you know what to look for. The throngs of customers, the retailer’s market strategy and the existence of this store in this specific location are all reflective of major trends reshaping one of the most common activities of our daily lives – grocery shopping.

The growth of ethnic groceries, from tiny hole-in-the-wall single-owner establishments to emporia as big and as polished as any operated by the national corporations, isn’t a new story. Within a few miles of Seafood City – a chain emphasizing Filipino foods and products that is big in California – are the Great Wall Mall, an Asian-themed retail center in a former Home Base hardware store anchored by pan-Asian chain 99 Ranch; the latest outpost of Uwajimaya, a Seattle-based retailer that actually got its start in Tacoma as a Japanese store but is now also more broadly Asian; and Viet-Wah, another locally based multi-store company.

The South Sound is seeing the same trend, with such retailers as East Asia Supermarket in Tacoma, Paldo World in Lakewood and Federal Way and, in the next ethnic-food grocery category likely to take off, La Huerta, a Mexican/Latino grocer with stores in Tacoma and Kent.

The proliferation of such retailers isn’t a surprise. Between the growth in numbers and affluence of immigrant populations who want a taste of the home country, and the increasing adventuresome American palate, retailers selling durians or chicharron (cooked pork meat) have found a segment of the grocery business that has grown well beyond niche status.

Don’t think the mainstream grocers haven’t noticed. They too have changed dramatically from the days when ethnic food meant brand names like La Choy or Chef Boyardee. If customers are demanding more exotic products, those retailers will have to stock them, or risk losing revenue.

But if the ethnic grocers are matching the mainstream retailers for size, customer volume and the polish of the presentation, what Seafood City has accomplished – putting a grocery store in a regional shopping mall anchored by the likes of Nordstrom and Macy’s – is something well beyond the traditional model employed by industry giants such as Kroger and Safeway.

For decades there’s been a clear line between merchandise retailers and grocers. Yes, there are retailers that blur the lines (Wal-Mart, Costco, Fred Meyer, Target and now even drug-store chains that carry some packaged food items). Yes, malls have long had food courts, and you could find stores in those malls that carried some food, mainly gourmet products.

By and large, though, grocery stores were seen as a much different retailing animal, operating in much different ways and places than, say, apparel merchants. What customer would want to lug bags of groceries out to a mall parking lot – or do any other shopping at the mall if they’re buying frozen or refrigerated items? What mall with any pretensions to being upscale would want the clutter and occasional smells of a fresh-food retailer?

Obviously someone in retailing management thought combining the two would work, and if one Saturday afternoon’s crowd is any indication, customers do too. If those crowds persist, expect to see more experiments in combining the two models.

You can certainly expect to see it from the grocers, who are all trying to figure out how they fit into an increasingly segmented category. What with retailers with clearly defined strategies and segments ranging from Whole Foods to Trader Joe’s to the regionally based Metropolitan Market to WinCo and Grocery Outlet and even Internet grocers nibbling (or in some cases chomping) pieces out of the customer base, no grocer wants to wind up without a specific value proposition to offer to customers – location, price, convenience, ethnic specialties, breadth of product selection.

Otherwise, the answer to that daily question of “What’s for dinner” is likely to be, for those grocers, “Your business.”

Bill Virgin’s column on business and economics appears Sunday in The News Tribune. He is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.

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