Hispanic Consumers: A Cure for Recession Blues?

More than 350 attendees to the Hispanic Retail 360 Summit gathered for the second day in Las Vegas to examine what effects the recession has on Hispanic consumers and their shopping habits.

Because Hispanic consumers tend to carry less debt and pay for items with cash, one theory is Hispanics may actually be less affected by the downturn in the economy, said Daniel Aversano, product leadership, Nielsen Consumer Panel Services for Nielsen, during the first general session of the day. Conversely, because Latino customers also are being impacted by high unemployment and the downturn in the construction industry, and generally have lower incomes than non-Hispanic customers, they could be impacted to a greater degree than the general market, he noted.

However, the picture is not that simple, Aversano explained, because the consumer is in the middle of the picture, and is influenced by the media, which has painted a gloomy picture of the economy. What really matters is consumer perceptions of the economy and their resulting actions, he said, noting purchasing power is increasing for some consumer groups, while July retail sales grew, and less jobs were lost in July than in previous months. “It’s starting to look like recovery,” he said.

While Hispanic unemployment is higher than the general market, at 12.3 percent, it has shown a leveling off in the past two months. Meanwhile, consumers were de-leveraging—during the economic boom, total consumers spent money they didn’t have, and now are saving their dollars or lowering debt, which is expected to continue once recovery occurs. However, since Hispanic consumers don’t hold as much debt compared to the total consumer group, they are a better consumer to target during the recovery since they aren’t de-leveraging or chaining their purchasing habits to the extent of the total consumer group, Aversano said.

Looking at the impact of the economy on a granular level, 41 percent of Hispanic consumers said they are eating at home more often for the breakfast daypart, while 60 percent said they are eating dinner at home more often, he said, noting the emphasis is now on what consumers need, not what they want.

“Value is king,” Aversano said. “When push comes to shove, you have to cut.”

When asked what they would cut spending on if they had to, Hispanic consumers said they would reduce money spent on energy, food, clothes, transportation, entertainment and travel.

“True economic recovery will not begin until Hispanics are convinced it is here,” he concluded.

The second general session of the day centered on supplier diversity, and was presented by Michael Byron, vice president of supplier diversity for grocer Supervalu.

Supplier diversity is “educating people to think differently,” on how it can connect companies to its communities, he explained, noting the “true meaning of supplier diversity is how we enrich lives of people in the community, and create jobs in its areas.”

If done properly, supplier diversity allows a company to differentiate its business model, along with supporting sales, gaining access to new markets and surviving the changing economy.

“Look at it as a competitive advantage,” Byron said, adding there are supplier diversity opportunities in construction, legal and marketing.

BREAK HERE

Following the general session, Hispanic Retail Excellence Awards were presented to Walmart for its Supermercado de Walmart, and Mi Pueblo Food Centers. In presenting the awards, Convenience Store News Editor-in-Chief Don Longo said the goal of the awards is to “recognize leadership of serving the wants and needs of Hispanic shoppers.”

Accepting the award for Walmart was Jose Antonio Fernandez, vice president of Supermercado de Walmart, while Mi Pueblo President Juvenal Chavez accepted the award on behalf of his San Jose, Calif.-based grocery chain.