Hoping to revitalize a well-known-in-Texas grocery store, the Bodega Latina Corporation, which operates grocery stores as El Super, has acquired the Houston-based Fiesta Mart. The purchase creates the largest Hispanic-focused supermarket chain in the country. Exact details of the sale have not yet been released, but the Houston Chronicle reports that the deal could be worth $300 million.
"The acquisition of Fiesta allows us to meaningfully expand into Texas via an established, well known supermarket operator. Through the combination of the strengths of our two organizations, we will be well positioned to significantly accelerate our vision of efficiently offering high quality products at the lowest possible prices," said Carlos Smith, president and CEO of Bodega Latina in a statement.
Fiesta Mart, with 63 stores in Texas including 32 stores in the Houston area and another large concentration of Fiesta stores in the Dallas metro area, is well known in the Lone Star State for having items considered specialty ingredients at other stores. The stores are also known for having great produce sections and bakeries with traditional goods, as well as low prices, even for hard to find ingredients.
The news is likely to mean a lot to Fiesta Mart customers who have stayed loyal to the store even with the rise of so much competition in the grocery store industry both from national chains like Walmart and Texas chains like H-E-B. Today, many larger grocery chains carry the same international food items as one could once only find in stores like Fiesta Mart, which has translated into a drop in customers and a struggle to stay relevant for the company that started out 46 years ago.
Smith said, "We believe this transaction will be beneficial for all of our stakeholders, including customers, suppliers, employees, and vendors. We look forward to welcoming Fiesta's talented employees and working together to create the premier Hispanic grocery retailer."
The purchase allows California-based Bodega Latina, which is a subsidiary of Grupo Comercial Chedraui, to expand in an area with a growing Hispanic population. The combined company will be a force to be reckoned with in the southwest United States with 122 stores in California, Arizona, Nevada, New Mexico, and Texas. About half of the country's Hispanic population lives in those five states, according to the Pew Research Center.
While the new chain is poised to do well, especially among its target demographic, it remains to be seen if the acquisition can truly save Fiesta Mart. This is the third sale for the chain in the last 14 years. Grocers Supply, a wholesale groceries distributor, bought Fiesta Mart in 2004, and then in 2015, the chain was purchased again by Acon Investments, a private equity firm in Washington, D.C.