As we prepare for 2012, I’d like to talk about an opportunity that continues to be increasing relevant in our retail market.
In August 2011, for the first time in its 54-year history, the International Council of Shopping Centers presented a “Hispanic Markets” conference, a national seminar and deal making event held in San Antonio.” So why now, after 54 years, is ICSC focusing on the Hispanic market? Because they now understand what our company has long known—this market is showing explosive growth, especially in Texas.
The proof is in the numbers. Dallas-Fort Worth—the state’s largest metropolitan area, with 6.65 million people—reports that 1.73 million are Hispanic. That Hispanic population, if formed as its own city, would rank as the nation’s fifth-largest.
The numbers tell the same story throughout the state. The major markets of Austin, DFW, Houston, and San Antonio together report a combined population of 15.71 million. Of that total, more than 5 million are Hispanic. That Hispanic total alone would replace Los Angeles as the nation’s second-largest city.
To date, much of the Hispanic-focused retail growth has centered on second-generation projects. For example, Weitzman’s leasing program replaced a vacant grocery space in East Dallas with a concept called El Rancho Supermercado, which has proven to be a strong traffic draw. In Austin, our leasing agents backfilled a long-vacant Albertsons with a Fallas Discount Store, a general merchandise retailer catering to the Hispanic market. These are a just two of examples from throughout Texas where a center with notable vacancy was revitalized through a focus on the Hispanic market.
So, can you revitalize a center in an area with strong Hispanic demographics by adding a Hispanic-focused grocer? The answer sometimes is no. One reason for this is that traditional grocers can be successful at attracting this population segment’s business. For example, in San Antonio, according to a 2004 study by New American Dimensions, approximately 88 percent of the market’s primarily Spanish speakers shop at H-E-B, the leading grocer in the area. Major chains like H-E-B and Walmart have proven successful at attracting Hispanic shoppers overall, while smaller concepts like La Michoacana and El Rancho Supermercado do well with first- and second-generation Mexican-Americans.
The traditional retailers also have launched Hispanic concepts of their own, though these are typically limited in terms of locations. In Houston, H-E-B operates Mi Tienda, Walmart operates Supermercado de Walmart and Sam’s operates Más Club. In other example, Save-A-Lot co-branded with Hispanic grocer El Ahorro to convert six South Texas locations to Save-A-Lot El Ahorro. We may see this hybrid approach more often as traditional grocers seek to attract a growing Hispanic market, and Hispanic-focused grocers seek to expand their draw to a wider demographic.
Whatever approach these retailers take, it should help improve the traffic to the centers they anchor by understanding, and meeting the needs of, the growing Hispanic population.
