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Boys Finds Niche in Urban Market : Grocery Chain Treads Where Others Fear to Go, Succeeds by Catering to Ethnic Tastes

October 05, 1987|MARTHA GROVES | Times Staff Writer

At a market on Pacific Boulevard in heavily Latino Huntington Park, the accent is on 25-pound bags of La Pina flour, containers of masa harina and votive candles, with festive pinatas overhead .

In a Koreatown store at Eighth Street and Western Avenue, shoppers browse displays of dried fish, Japanese beer, sake and soy sauce, many with signs in English, Spanish, Korean and Japanese.

At a grocery 100 yards from moored yachts in Marina del Rey, customers prepare their own takeout meals at a salad bar and buy sushi to go, while patrons at 103rd and Compton in Watts stroll aisles stocked with black-eyed peas in bulk and a large variety of pork products.

What is noteworthy about these four, seemingly unrelated stores is that they are all operated by Boys Markets, a Highland Park company that began nearly 67 years ago as a door-to-door produce vendor and has built a successful mini-empire in the minority neighborhoods of Southern California that most major competitors have abandoned or ignored.

Of Boys' 55 stores, about 80% are in predominantly Asian, black or Latino neighborhoods in Los Angeles County. The rest are scattered in primarily Anglo communities, with a couple of newer locations catering to Santa Ana's Latino population.

In a few communities, particularly Watts, some residents contend that the company exploits them by charging high prices, and recent surveys by a Southern California consumer group appear to prove that Boys prices are indeed higher than those at most chains.

Because of these higher prices, Boys is "not my store of choice, they are my store of convenience," said Barbara Thomas, a leader of the South Central Organizing Committee, a grass-roots organization of urban residents in areas such as Watts.

Nonetheless, she and other inner-city shoppers applaud the company for just being there. Typical Americans "put a priority on convenience, and Boys is there right at your back door," said Thomas, who frequently buys food for her church's functions at the Watts store.

Investment analysts who have started to study the company after its recent initial public offering admire Boys' convenience orientation and ethnic push. "(Supermarkets are) a very slow-growth business, (and) they have a unique niche," said Fran Blechman Bernstein, a vice president at Merrill Lynch Capital Markets in New York. "They know their customer," noted Su-Moon Paik, an analyst at the L. H. Alton institutional brokerage in San Francisco.

Boys' policy of marketing to ethnic communities evolved slowly through the decades, then became a full-blown strategy about 1980, said Peter J. Sodini, who was named president in 1978 and is now also chief executive.

By the time Sodini was brought in, the family-run company had stopped adding locations and was "losing out in the numbers game" to larger chains that got first crack at choice sites, particularly in the fast-growing suburbs, Sodini said. About the only places available were urban spots that had been passed over by others.

So Boys made the decision about 1980 to concentrate on the urban areas which other chains were forsaking. "We took what was offered and went on an extensive remodeling program," Sodini, 46, said in an interview at the company's headquarters, a converted Highland Park grocery store.

"We recognized that there was tremendous population growth. We concluded that if you're going to be successful, you have to run stores comparable in quality to (those in) suburbia."

Demographics would indicate that Boys is now clearly "aligned with the growth segment, which is Hispanic," Sodini said.

"More and more of the locations that at one time were predominantly black now have significant (Latino) populations," he said. The Compton store, for example, which had served primarily black customers, now sells to a mix that is about 50% Latino, he said.

Since 1980, the population of Los Angeles County alone has grown nearly 10%, to more than 8.1 million, with Latinos accounting for perhaps 70% of that growth, according to reports cited by Boys. The Center for Continuing Study of the California Economy, a research group in Palo Alto, said the Latino population is expected to grow to 33.7% of the county's population in 1995, up from 30.5% now.

Tailored Merchandise

With stores as diverse as those in the Marina and Koreatown, however, it's clear that the company strategy geared to inner-city minorities is not entirely consistent. But Sodini noted that the Marina store, opened in 1968 and recently remodeled, was one that had been passed over "by virtually everyone" because the area had not yet developed. For the first five years of Boys' ownership, the store was an "abject failure." Then the Marina took off, and so did the store.

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