NEGLECTING LATINO SHOPPERS LEAVES BIG MARKET CHAINS HOLDING THE BAG.

Byline: Brent Hopkins Staff Writer

Major grocery chains have steadily retreated from parts of the East San Fernando Valley, closing unprofitable locations. But soon after the chains locked their doors, Latino-oriented mercados have moved in and found success.

In recent months, names like Vallarta Supermarkets, Superior Super Warehouse and El Super have replaced shuttered Costco, Vons and Albertson's stores. As the four-month strike by the United Food and Commercial Workers union has interrupted commerce at Vons, Albertson's and Ralphs, these Latino grocers have won new customers and expect to keep them after the dispute is settled.

Experts say these markets, with their carnitas counters and fresh baked bolillo rolls, represent one of the most promising segments of the otherwise troubled grocery industry.

``The major chains don't get it; they don't understand that the face of Southern California is changing,'' said Joe Benites, president of The Benites Group, a Glendale-based grocer consultant.

``The stores like Vallarta and all the independents cater to the Hispanic trade. Albertson's puts a store in there, it doesn't do well, they vacate it and Vallarta takes it over. Now, you can hardly park, it's so packed.''

Vallarta, a 15-store chain based in Canoga Park, has grown dramatically in recent years, operating stores stretching to Bakersfield and Baldwin Park.

Though it boasts the largest local presence among Latino chains, it has growing competition.

El Super, a four-store operation, recently hired 200 workers for its North Hollywood location, scheduled to open Feb. 18.

Superior Super Warehouse, which operates 18 stores in the Los Angeles region, will open its second Valley location in North Hollywood Jan. 29 and is looking for other locations. Each opening brings hundreds of jobs into the community, paying above minimum wage with benefits.

``The reason we're successful is we're local,'' said Phil Lawrence, senior vice president of operations for the Santa Fe Springs-based Superior. ``We're not telling someone in Chicago to merchandise their store. We understand the area, we understand the people and the employees we hire are from here.''

Shoppers can find the same name brands they expect at major supermarkets, but also see marked differences when they walk in the door. Produce managers keep plentiful fresh fruit and vegetables, mindful that Latino shoppers tend to cook from scratch.

``There's fresh things and variety in the fruits and vegetables,'' said Pacoima housewife Enic Romero in Spanish while shopping at the Pacoima Superior. ``I've been to other markets, but I like it better here. They have better prices and better things.''

Meat counters, known as carnicerias, have butchers hacking out thin-sliced carne asada while the scent of sweet concha rolls wafts from panaderias. And unlike traditional supermarkets, most signs are bilingual, as are most of the workers.

``Latinos want to be communicated to in their native language, they want an emphasis on a bigger meat department, bigger produce, more fresh food,'' said Steve Soto, president and chief executive officer of the Mexican American Grocers Association. ``If Mrs. Gomez walks in and she only speaks Spanish, but the clerk only speaks English, she'll walk out and never come back.''

And she'll take with her considerable purchasing power, as well. The average Latino consumer spends $117 a week on food, according to the Food Marketing Institute, far above the general average of $83 per week. As Latinos represent an increasingly large part of the population, with 1.72 million households in Southern California - 30.5 percent of the population, according to recent Census data - they've become crucial to any chain's hope for success.

Roman Carlos, an Arleta hardwood-floor installer, visits the Pacoima Superior each week with his sons Eric and Kevin. A single parent, he saves money by cooking chorizo tortas and beef stews at home, spending between $100 and $120 per visit.

``I come here all the time,'' he said. ``They have more variety and better prices. They've got lots of Mexican spices and it's cheaper than the supermarket.''

In time, the competition will only get more fierce. Soto has watched major chains try to market to Latinos for years with little success, but he figures they'll eventually catch on.

But as they do, they'll be slugging it out against Gigante, a Mexican chain that has announced plans to open 55 full-sized supermarkets throughout California. The chain opened its eighth area store in South Los Angeles on Wednesday and Soto says it has its eyes on the Valley, putting even more heat on the majors.

``Their margin's 1 percent and they're losing their customers to stores like Gigante,'' Soto said ``The light bulb better go on: 'Hey I'm doing something wrong.' Once Gigante gets there, it'll be a different ballgame. They've got a lot of money, and they're no-nonsense people.''

Brent Hopkins, [phone]

brent.hopkins(at)dailynews.com

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4 photos

Photo:

(1 -- color) Roman Carlos, left, shops with his two sons, Eric, 13, center, and Kevin, 12, at Superior Super Warehouse in Pacoima.

(2 -- color) Raul Hernandez, 5, gets up close and personal with the live catfish at Superior Super Warehouse. Fresh food is key at Latino markets.

(3 -- color) Zaidia Habib puts hot tostadas in a bin before packaging in the fresh tortilla factory at Superior Super Warehouse in Pacoima as Isabel Mendoza works in the background.

(4 -- color) Fresh whole tilapia wait on ice for customers at Super Superior Warehouse.

Charlotte Schmid-Maybach/Staff Photographer