Tuesday, February 15, 2005

It's a Small World

I read an article that caught my eye this morning. Two, in fact. One was talking about a new convenience store being introduced to the US. FamilyMart is one of Japan's largest convenience stores. The first will open in July in upscale West Hollywood, a part of the "golden" area of Southern California.

FamilyMart isn't your average convenience store. Most Americans look at a convenience store as a place to pick up snacks for the road while gassing up the car, a quick soda or a newspaper. Japan's FamilyMart will freshen the idea of "konbini" - convenience. FamilyMart is viewed as an extension of a customers refrigerator. They will sell 140 food items including Bento Boxes, rice balls, sushi, and bread. It is well maintained and young women can feel safe, alone, in the store late at night. FamilyMart will target high end shoppers, offering them convenience and quality you don't find in regular convenience stores.

FamilyMart is concentrating on the West coast for now hoping to open 200 stores by 2009. The East coast will be developed gradually. Many analysts aren't viewing this expansion with a lot of confidence. They are not sure Americans will appreciate the new idea of Japanese convenience. I think they are wrong. (are these guys publicly traded???)

The second story was in the Toledo Blade. This article is extolling the virtues of many of Toledo's small ethnic grocery stores. "The customers that frequent these stores aren't especially concerned about self check-out lanes, the lowest prices. or even an advertised special" to quote the article. This article tells the story I have been developing with my GIANT store series. These stores offer something else to their customers: a place to feel a bit of home, hear a native language and a connection with the "neighborhood" in which they live. Thirty percent of the average ethnic store customer is "American".

The stores cater to Indian, Pakistani, Asian and Mexican Americans in nearby neighborhoods. Most of their customers shop them for the language connection, but largely for the variety of foods carried. The GIANT cannot begin to compete in these areas. GIANT stores must make money. They must turn their inventories over quickly. If they carry ethnic foods that will rival the small purveyor of these items it would certainly bring down the "turn". Shelf space is costly and GIANT stores cannot allow the shelf to be filled for any length of time. Their overhead prevents them from being everything to everyone.

According to the Food Marketing Institute,nine out of ten GIANT stores carry ethnic varieties. However, when I go into the GIANT to pick up a favorite ethnic food from say the Bayou state or a Danish dessert preparation, the item I want is not carried. Let's go back to that "turn" factor. If I am the only foodie in a 50 mile radius that has found that most wonderful glaze for tarts, the GIANT says "buy the case or don't buy it at all. We are not here to fill your every need. We are here to fill the needs of the average consumer". Basically, they are asking me, their customer to shop at a small ethnic grocer.

So will FamilyMart make it? I think so. Just as 14 or so ethnic grocers in Toledo have found a way to succeed, so will the FamilyMart. In my small community, a GIANT store has 6 stores, many other GIANT compeptitors have come and gone. They state they cannot compete with this GIANT, so they leave and give this GIANT his due. An interesting phenomenon has taken place however, in the past two years, Cardenas, a local ethnic grocer is succeeding where other GIANTS couldn't. Why? Because they know their customer and give them what they want.

Don't be too quick to dismiss that small ethnic food store down the block. Go over, take a look inside, you might find that longed for ingredient you tasted on that exotic trip you took! You'll be happy you did, and so will the small store owner.