Mexican supermarket chain heads north to L.A.

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MEXICO CITY--Mexican retailer Grupo Gigante hasopened its first store north of the border and plans tounveil another two supermarkets in southern Californiathis year.

Gigante is one of Mexico's leading grocery store chains.It operates more than 190 outlets under several differentnames, including Gigante (giant) and Super G. While theaverage Gigante grocery store in Mexico carries appliancesand clothing in addition to fresh foods and other groceryitems, the California stores are conventional supermarkets,says Justo Frias, director of the chain's Baja Californiadivision, which is overseeing the California expansion.

The first store opened on May 5 in Pico Rivera, a predominantly Hispanic suburb of Los Angeles. Mr. Frias notes thatLos Angeles' population is 52% Latino, of which 85% are Mexican or Mexican-American. Gigante has good name recognitionamong this group.

Most of the products carried in the new store are American-made. Gigante aims to compete with other stores that targetthe same demographic on price and with a better selection ofMexican goods. Given the emphasis on pricing, Gigante'sinitial U.S. advertising efforts are focused on flyers andradio spots, Mr. Frias says.

Before year-end, Gigante will open a store in the easternsection of Los Angeles and one in the San Fernando Valley.

For now, Gigante has no plans to enter other U.S. Hispanicmarkets, such as Texas. In addition to its supermarket business, Gigante operates Office Depot de Mexico. It sold outof its joint venture with French hypermarket chain Carrefourin February 1998, reportedly to focus on its own expansion.

Copyright May 1999, Crain Communications Inc.

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