Big grocers aim for authenticity with ethnic consumers

Loblaw, Sobeys and more have opened ethnic format stores. But are they authentic enough?


Fifty-pound bag of onions once taught Jas Athwal, the director of ethnic merchandising at Overwaitea Food Group, a valuable lesson about what it takes to connect with South Asian shoppers.

It was 2012, and Overwaitea’s Save-On-Foods in Surrey, B.C., wasn’t doing enough to keep up with the surrounding area’s growing South Asian population. Strangely, even bags of onions–a staple in South Asian cuisine–weren’t selling well, says Athwal, himself of South Asian descent.

Determined to connect with this growing group, Athwal got the store’s skeptical produce manager to bring in 12 skids of 50-pound bags of onions. He even promised to buy them himself if they didn’t sell. The new bags were better quality than the 10-pound bags the store had been carrying–and the same price. Athwal made sure the new onions were positioned at the front of the store.

READ: How is FreshCo is connecting with South Asian shoppers?

His plan worked. The store sold out of the big bags in seven days. “It was insane that we could sell 50-pound bags when we couldn’t sell five-, 10- or 25-pound bags before,” says Athwal. “We learned a lesson: if the customer doesn’t shop with you today, it’s because you don’t have what they’re looking for.” South Asian shoppers, he says, want high-quality basics such as onions, flour, lentils and spices at competitive prices. They also tend to have large families that include several generations living and eating together. Hence the need for big bags.

Such lessons can be seen in the newly named Save-On-Foods “International” in Surrey, Overwaitea’s first store under this banner. It contains “skid upon skid” of those 50-pound bags of onions in its produce department, says Athwal, who has been with Overwaitea for nearly 30 years. The store, which opened in November, carries half mainstream groceries and half international foods from places including India, China, Philippines, Germany and the U.K.

It is one of a new crop of stores that major Canadian grocers have recently opened to attract ethnic consumers. In the Greater Toronto Area, for example, Loblaw and Sobeys are also working to get a piece of the ethnic pie. It’s no surprise given Canada’s changing demographics: according to Statistics Canada, the South Asian population in Canada is projected to grow to 8.7% in 2031 from 4.1% in 2006; the Chinese population to 6.4% from 3.9% during the same period.

Helping families that have moved to Canada feel an authentic connection with these new ethnic grocery stores is important. In the past, immigrant families who wanted a taste of home shopped at ethnic grocery stores. While mainstream retailers often carry products for various ethnic cuisines, South Asian immigrants and their descendants have complained the products are “watered-down versions,” says Salima Jivraj of Halal & Co Media, an Ajax, Ont.-based marketing firm that’s done focus groups with South Asian shoppers.


This has created a huge opportunity for traditional grocers to stock more tailored assortments and create the right in-store experience in their new ethnic stores. Take the Chalo FreshCo (chalo means “let’s go” in Hindi) discount store that Sobeys opened in the Toronto suburb of Brampton in August. The store caters to the area’s large South Asian community of about 200,000 people. During a store visit in October, for example, there were none of the mainstream seasonal displays–scarecrows, pumpkins and hay bales–in sight.

Instead, Lynn Cooper, FreshCo’s director of operations, was working on a sale on fireworks in the lead-up to Diwali, the Hindu festival of lights in November. That’s because while many of Chalo’s customers likely picked up some Halloween candy, they were more interested in buying goods for Diwali, says Fazal Siddiqi, president of Toronto-based Opal Marketing Group, which advises retailers on ethnic consumer trends. “At the end of the day, Diwali is the major event,” he says.

Carrying products that show an understanding of what’s important to Chalo’s target South Asian shoppers, such as Indian sweets, fresh produce and large bags of flour, makes them feel more welcome, says Siddiqi. So does the fact that the store hires staff that speaks Hindi and Punjabi. “It’s a good step,” he says. “It will make a difference.”


Inside the 50,000-sq.-ft. Chalo, shoppers are greeted with an assortment of fresh produce popular in South Asian cuisine. This includes parwar, snake gourd and naseberry chickoo, which were initially sourced by Chalo’s buyers on trips to India. About one-third of the produce is displayed in colourful carts that mimic those seen in Indian markets.

But it takes more than displays to satisfy Chalo’s customers, says store operator, Danny Sandher. Like Athwal’s customers at Save-On-Foods International, Sandher’s shoppers also want an authentic taste of home. That doesn’t always require a trip to India. “We have partnerships with about 50 [North American] manufacturers of authentic Indian foods,” says Sandher. Some include Surrey’s Nanak Foods and Etobicoke, Ont.-based Samosa Sweet Factory.

Prabhjot Breen, a customer, is impressed by the high quality of Indian foods on offer in Chalo. Originally from India, she’s been in Canada for a decade. Breen cooks Canadian and Indian food, and is happy she can buy anything needed for either cuisine at Chalo. “Before I had to go to two or three stores.”

The inclination for South Asians to shop at stores run by large grocers already exists. Research from Pearl Strategy Innovation, a consulting firm in Toronto, shows that South Asians living in Canada for a while prefer to shop at conventional stores. As managing partner Susan Weaver says, “Indian stores are more expensive and the location is challenging.” There’s also a perception that they’re more cluttered and not as clean as mainstream grocery stores.


A 25-minute drive south of Chalo, a newly renovated Real Canadian Superstore in Mississauga, Ont., is the antithesis of cluttered. Half the store looks like any other Superstore, with its cookware and household items. But the food aisles are stacked neatly with large bags of rice and flour. While Loblaw says the store caters to all communities, goods on offer suggest it’s trying to satisfy South Asian and Asian consumers–a wise move in Mississauga, where 21% of the population is South Asian and 15.9% East or Southeast Asian.

This store reopened in July and has 3,000 new products in the grocery department, more than 700 of which are new fresh offerings. The store boasts an expanded fresh seafood selection triple the size of its pre-renovation offering, and is reminiscent of many independent ethnic grocery stores, with 16 tanks of live fish and 28 species of live seafood. Interestingly, this department is set up right at one of the store’s front doors.

The produce department has 100 new items, including an expanded assortment of figs, dates and Caribbean fruit. The meat department features a separate section with only certified halal meats.

Also new is a T&T sushi and teppanyaki bar, “the first in a Canadian discount grocery store,” says Chris Fisher, VP of multicultural merchandising at Loblaw. And the bakery department now stocks a variety of ethnic treats, such as Brar’s Indian sweets and Asian sweet buns.

Overwaitea’s Athwal is convinced that mainstream grocers need to enhance their traditional offerings if they are to increase sales. “Ethnic merchandising is going to be the future of retailing,” he says. “It’s really going to change the landscape of how we merchandise. We can’t be cookie-cutter stores.”


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