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Doing so hasn't always been easy. As a relative small fry in the U.S. market, Gigante doesn't have the advantages that size confers on some competitors. The company employs three full-time product buyers who scour farmers' markets and Mexican grocery stores for the optimum mix of U.S. and Mexican brands. Yet like most small grocery chains, Gigante initially stocked the shelves of its U.S. stores with goods supplied by a wholesaling company that dealt with food manufacturers. Since then, growth has allowed for bigger orders at lower prices negotiated directly with manufacturers. (One hiccup along the way: Frias says when Gigante negotiated with Frito-Lay, uninformed local staff members at the giant snackmaker initially asked him for a personal guarantee that he would cover any outstanding payments--something typically asked only of the proprietors of family-owned shops.)
Gigante won't provide specific figures, but Frias says, measured in sales per square foot, Latino grocery stores outperform traditional supermarkets by 25% in L.A. neighborhoods where the two go head to head. Indeed, some of the U.S.-based chains are offering Gigante the sincerest flattery by trying to copy its business model. Last year Albertsons, based in Boise, Idaho, the country's second largest supermarket chain, after Kroger, launched an effort to attract Latinos by revamping three slumping Southern California stores in predominantly Latino areas. The company hung Spanish-English signs over the aisles, expanded produce sections 30%, quadrupled the size of meat counters, piped in Mexican pop music and renamed the stores Super Savers. Business has doubled in the eight months since the Super Savers opened, and now Larry Johnston, Albertsons CEO, says the company plans to open such stores "all over the country."
Wal-Mart, which is now the biggest retailer in Mexico and one reason Gigante's same-store sales there slipped 5.5% during the first nine months of last year, also plans to join the supermarket battle in California. It will build 40 Supercenters --discount variety stores combined with supermarkets--and aims to use experience gained in Mexico to aggressively target U.S. Latinos. "The chains are coming back and moving in," says Soto. "It's going to be a dogfight."