Ethnic Grocers Gobble Up Traditional Supermarket Space

Ethnic grocers are eating up traditional supermarkets across Southern California.

Growing Asian specialty chains from H Mart and 99 Ranch to other ethnic grocers are moving into storefronts vacated by such supermarkets as Vons and Ralphs, Bisnow reported.

Foodies on the hunt for sushi-grade fish, spicy Thai peppers and home-style chorizo are driving demand for big-box space while legacy grocers shrink through mergers and acquisitions.

“The general population is more diverse and open-minded in their thinking,” JLL Senior Vice President Ken Shishido told Bisnow. “There are some areas where your normal English-speaking population wouldn’t think about going into a Hispanic market or an Asian market.

“And now, we’re all looking for the best food.”

The customer base of once-niche ethnic markets has grown to include immigrants, their children and those who don’t belong to these ethnic groups.

The arc toward ethnic rose during the pandemic, when home cooking sizzled during lockdown orders. Then came a rush to restaurants, and a return to at-home meals because of inflation.

A new generation of cooks isn’t satisfied with making Salisbury steak, with millennials shown in surveys to be more adventurous cooks, a trend accelerated by cooking-specific social media channels and food-related TV shows.

As a result, larger ethnic chains are expanding to reach a larger radius of shoppers — and may be raking in more dollars per square foot than more traditional markets.

When Buena Park-based 99 Ranch Market signed a 15-year lease to open a new store in a former Vons in Tustin, the landlord anticipated the store would perform better than previous tenants, ValueRock Realty Partners Senior Vice President Dennis Vaccaro told the Orange County Business Journal.

Last year, H Mart leased a 69,000-square-foot former Vons in Westminster. In 2021, the Korean-American grocery chain based in New Jersey replaced two “underperforming” Albertsons stores in Irvine.

H Mart, founded in 1982 in Queens, New York, hit the mainstream with a memoir by Japanese Breakfast musician Michelle Zauner entitled “Crying in H Mart.” Critics have called the chain’s Asian staples a “full on snack attack,” with an “aisle of noodle insanity.”

The pending $20 billion merger of Kroger and Albertsons will put a reported 400 stores on the market as the companies seek Federal Trade Commission approval for their deal. Local chains like Vons and Ralphs are also shrinking their footprints, providing openings for ethnic expansion.

Not all grocers take over space inhabited by former rivals, according to Bisnow.

The much-anticipated 99 Ranch in Westwood is moving into a space vacated by a Ross Dress for Less. That store is part of a growth spurt for 99 Ranch. The chain has opened seven stores since 2020, giving it 58 stores across 11 states, according to the Los Angeles Times.

“These operators are incredibly sophisticated,” Primestor Development CEO Arturo Sneider told Bisnow, referring to the larger chain ethnic markets. “They themselves are being run by second-, third-, fourth-generation family members, and in the case of Latino grocers and even Asian grocers, they’re evolving and adapting to the new consumer that is really an American Latino or American Asian customer.”

Vallarta Supermarkets, which announced last spring it would double the size of its headquarters with a move from Sylmar to Santa Clarita, has 53 locations across California, making it one of the largest Latino-owned supermarket chains in the state.

— Dana Bartholomew