HOUSTON -- Fiesta Mart here is aiming to make its hot deli a destination spot by tailoring its product mix to individual neighborhoods and by touting family-size meals.
Until now, snack-type foods such as tacos and burritos and a limited selection of individual meals with an Hispanic accent have made up the bulk of hot food sales, and have represented primarily impulse buys, said John Eagleson, hot deli supervisor for the 18-unit chain.
"I'd say 90% of sales from our hot delis are impulse, but I want to bring that down to 60% by making our department a destination. Offering family meals is one way to do it. That also has helped us increase evening business," Eagleson added.
Particularly because Fiesta Mart's units are located in areas with greatly varied demographic profiles, Eagleson has taken a close look at what is selling where, he said.
"I've eliminated some items such as hot dogs and cotton candy at most of our locations, and individual bags of chips at all of them," he said. Most stores didn't sell enough to make it worth while to carry them, and the company just didn't make enough money on the latter item, he said.
Gourmet pizza has been eliminated at some stores, too, because sales weren't high enough, while barbecued ribs and fresh cooked vegetables were added. Fitting the hot deli product mix to the neighborhood may be Fiesta's key to success, according to one local observer here. "I'm not familiar with their new strategy, but I do know that in the past, the hot deli wasn't a money-maker for them. They threw out more than they sold at some locations," the observer said.
Another local industry source also told SN that fine-tuning products and merchandising to the neighborhood are winners in Houston. "The retailers here who are doing that are the successful ones. Others are losing out."
To help determine what to offer, Eagleson said he did his own research to see what people were buying in each neighborhood.
"I walked around and looked to see what people were standing in line to buy at little, corner restaurants and delis," he said.
Originally, Fiesta Mart catered primarily to the Hispanic population, but with the opening of stores in new areas that is no longer true at every location. "In some of our markets, the Hispanic population is 70% to 80%. In others, it's no more than 30%," Eagleson said.
"I want to sell what the customer wants," he said, adding that many retailers seem to regard their hot delis mostly as feeding places for their employees and don't bother thinking of ways to sell more.
Fiesta Mart has recently put A-frame signs outside each store that say, "Home-cooked meals at take-out prices," and has developed value-priced family meals. All stores have begun to use bag stuffers calling attention to the meals.
The menu of family meals includes a pound of beef fajitas, a pint of rice, a pint of beans, and 10 flour or corn tortillas for $7.99, and eight pieces of fried chicken, a choice of two pounds of vegetables, with bread, rolls or tortillas for $6.99. A rotisserie chicken meal is also a recent addition. The meal concept was tested with "good results" last spring at the chain's store in Austin and has since been rolled out to all locations. While he declined to give percentages of sales increases since the meal launch, Eagleson said, "It has worked very, very well. We're pleased." In addition to micromarketing and putting together meal packages, the company will locate its hot deli in the middle of the front of the store in all new locations to attract more shoppers. "It's important that they see the department when they enter the store. That way, they know right away that they can easily stop on their way out after they've completed their grocery shopping. We learned that from our Taquerias [expanded hot food departments with highly visible preparation and cooking areas] in our Austin and Dallas stores," Eagleson said. His long-term goal is to perfect a large variety of entrees and rotate them so the customer will see something different on the menu each weekend. He also wants to develop signature items at different locations. One signature item of long-standing appeals particularly to the Hispanic community. It's barbacoa, the cheek meat from a steamed cow head.
"In some stores, we steam 40 or 50 cow heads a weekend, but in others, where the demand is less, we use a barbacoa made for us," he said.