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Giovanni Palavacini: It’s Time to Take the Sleeping Giant Seriously

The Hispanic population is growing exponentially faster than any other ethnic group in the United States, and its buying power is tremendous. This is especially true in Texas. Yet few retailers are targeting this huge and influential market.
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The Hispanic population is growing exponentially faster than any other ethnic group in the United States, and its buying power is tremendous. Initial census results show the population of Texas grew by 4.3 million people in the past decade, and Hispanics accounted for 65 percent of that growth—nearly 2.8 million people since 2000. There are now more than 9 million Hispanics in the state of Texas, accounting for about 38 percent of the total population.

According to the Selig Center for Economic Growth at the University of Georgia’s Terry College of Business, the buying power of the Hispanics in the United States was $1 trillion in 2010 and will top $1.5 trillion by 2015. Among U.S. states, Texas ranks second, with $176 billion in Hispanic buying power, second only to California’s $265 billion. With numbers like that, how can retailers continue to ignore the potential of tapping into huge and influential market?

A few national and regional retailers have already recognized the need to target the Hispanic consumer. In recent years, Ross Dress for Less has created DD’s Discounts, an even deeper discounted store, opening in low to middle income ethnic markets. There also has been a big push by mainstream grocery stores to shift attention into this segment of the market.

In 2009, Walmart opened two pilot stores in Phoenix and Houston called named Supermercado de Walmart, targeting Hispanic consumers. Regionally, there has been a push by two private grocers to penetrate the market: H-E-B opened a Mi Tienda (“my grocery store” in Spanish) and United Markets opened three Amigo stores in West Texas. Privately owned Supermercado El Rancho now has nine stores open through out Central and North Texas, with three more to be opened this summer in Austin, Fort Worth, and Odessa.

These retailers have realized that it’s time to capture the underserved Hispanic market and take the sleeping giant seriously.

Giovanni Palavicini is founder of Fronteras, a Dallas real estate firm that specializes in the Latino market. Contact him at [email protected].

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