Sedano's New Generation
The nation's largest Hispanic retailer is trying to win over younger Cuban-Americans and capture new arrivals from the Americas and Caribbean.
[Photos: Above, Alex Gort Jr.
Below, Eileen Escarda]
Sedano’s success at locations abandoned by Winn-Dixie and Albertson’s testifies to the chain’s ability to cater to Hispanic tastes with specialized goods and low-priced staples. Sedano’s, for instance, hasn’t raised its milk price above $3.49 per gallon for two years, while Publix milk reached $4.69 per gallon before it cut the price to $3.59 this year as part of its “essentials” promotion. Sedano’s presses its vendors to keep their prices low, though sometimes the staples become loss leaders.
The Herráns also have been conservative, growing only with reinvested profits. The chain now has 25 stores in Miami-Dade, four in Broward and one in Palm Beach, including the still profitable 5,000-sq.-ft. store in Hialeah where the chain began. But that conservative approach also means their new prototype in west Miami is arriving as the fourth supermarket in the area, with a Publix, Winn-Dixie and an independent already doing business there. Only last year did Sedano’s launch its own private label — typically more profitable than branded goods for supermarkets — and the line is up to just 25 items.
As competitors for Hispanics pile in to pursue one of the few growth markets for supermarkets — Publix opened its second Hispanic-oriented Sabor store in Miami-Dade in October — Sedano’s is looking for a new marketing approach.
“ ‘It’s where your mom shops’ — we maybe have that image,” Javier Herrán acknowledges somewhat reluctantly. The 32-year-old says he has noticed Publix products in friends’ homes. “It was pretty obvious to us. We are that second generation. It’s obvious that’s the people we need to target.”
That second generation now is coming to the fore. Manuel Herrán and Jose Sr. remain chairmen, and Ezequiel continues as vice president of store development. But Manuel’s son Agustin is president and CEO, Jose Jr. is COO and head buyer, and Javier is director of marketing and heads IT. Other second-generation family members work as store managers and supervisors and as controller.
This year, Sedano’s replaced its longtime ad agency, SiboneyUSA, with Miami advertising and public relations agency República, which also works for Burger King and PepsiCo, among others, to create a new media thrust for its annual $3 million in advertising. And it remodeled one store, is remodeling five others and opened its new store in September.