Meet Market

For a month or so this spring, the most confusing sign in Phoenix was the one on the broad beige façade of Southwest Supermarkets' new Phoenix store, at Seventh Street and McDowell Road. Its green and orange corporate cursive reads "SW Desert Market." But on a warm afternoon late in May, a repairman took it to mean "Not Southwest Supermarkets."

Standing outside the store, in dungarees and a blue work shirt, he puzzled briefly over the sign. Then, with the kind of "beats me" look you never want to see on the face of someone coming to fix something, he headed through the open front doors straight for Tony Gioia.

Sitting atop a nearby table, Gioia, the affable president of the grocery chain, was confidently reciting the ways in which the store -- still more than a week away from opening -- would differ from Southwest's older Latino-oriented supermarkets.

"The quality of the offering will be a little more higher end," he assured in his soft New York cadence. "The deli will be a bit more specialized. We're going to have fresh-made pizzas every day. We're going to have Chompies bagels in here. We're going to have sushi. Think of that, sushi!"

But the approaching repairman was thinking only about the name.

"Is this a Southwest market?" he asked hesitantly.

Gioia, who had been answering various forms of that question for months, was tired of hearing it. So his tone hardened:

"No, this is SW Desert Market."

The man was incredulous:

"This is not Southwest?"

It turned out that Mr. Fixit simply wanted to be shown the blown-out fan motor in the meat case.

Yet Gioia's testiness about the store's identity was telling.

Through much of the spring, he and Southwest had been bombarded by complaints from downtown neighborhood leaders who opposed the chain's purchase of the defunct ABCO store at the site.

They accused Southwest, which has catered to Hispanic shoppers for more than 20 years, of operating filthy stores, selling expired foods and moldy and repackaged meats, and blighting the neighborhoods that surround its markets.

They asked the city to intercede, pleaded with the high-rolling AJ's Fine Foods and Trader Joe's markets to move there instead, and threatened to boycott the Southwest store.

The reception -- as if the store were running an E. coli special in the produce section -- was a far cry from the one ABCO received when it moved in five years ago. Downtown business alliances hailed ABCO's arrival -- the first new downtown supermarket in years -- as crucial to schemes of attracting more high-end housing to the area. Residents said it would lead to the revival of downtown retail. The city even rolled out a green carpet of $200,000 in sidewalk and street improvements and rebates on city development fees.

Southwest opponents claimed that the company's reputation lay at the heart of the uproar.

"They've always set up in depressed or slum and blighted areas," says Trace Vencenza, president of the Roosevelt Neighborhood Association, who helped to spearhead neighborhood opposition to Southwest. "So the stigma of bringing a store associated with a blighted area to a gentrified area just made people crazy."

But the opponents' critics claimed the commotion was more about affluent Anglos not wanting to shop in a grocery store filled with Mexicans. In what has become a familiar cycle of accusations in a city being reshaped by immigration, columnists from the Arizona Republic and Hispanic leaders branded neighborhood gripers -- even though they included a handful of African-Americans and Hispanics -- as well-heeled racists, if not classists -- sheltered urban gentry who used Southwest's past sins to cover their own objections to businesses catering to poor Latinos.

"It was pretty clear that on the one hand the stores were being attacked because of their clientele," says Luis Ibarra, president of Friendly House, a social service agency that assists Hispanics. "On the other, the issue was the quality of the product and the conditions of the stores. They're two separate issues. Now that the store is open, I know that people will tell you, 'Thank God Tony didn't make this a Mexican store.'"

But, in a way, Tony did.

"All the Mexican foods are here," says Gioia, waving with showroom confidence at the bright rows of fully-stocked shelves. "But they're low-key. We knew we had to appeal to the upscale Anglo, while still merchandising Latino items in a positive and exciting way."

Tucked away -- like plutonium -- in a cold case of their own are the organ meats and marrow guts that give ethnically challenged Anglo shoppers the willies. The rest of the store is arrayed with rows of the produce, canned and boxed goods that Latina cooks adore. And beyond the beans and rice in bulk are the spices, herbs and tortillas essential to Mexican meals.

Missing is the carniceria ambiance -- the down-home, full-on brass and squeezebox music and Spanish radio banter blasting above a cool heap of fresh tripe or pig snoots. There are no jewelry, music or check-cashing stores within the store (it has the same Wells Fargo branch that ABCO did), as there are at many other Southwest markets.

Neighborhood activists say these differences and the store's upscale format reflect their neighborhood, their tastes, their power to alter the corporate course of Gioia and Southwest.

"We leaned on him pretty hard about a lot of these things," says Kendra Vermeer, a Willo neighborhood activist and owner of an antique store on McDowell Road just west of Central Avenue. "He didn't do everything we asked. But he did a lot."

SW's crossover theme also reflects something far more complex: that Hispanics and their tastes are moving well beyond the barrios into the local mainstream, sparking the kind of identity crisis -- for institutions, for neighborhoods -- that underlies the Southwest controversy.

Downtown neighborhoods lie at the heart of a Latino wave that's sweeping north and west beyond the central city to large areas of west Phoenix, Glendale and Peoria, and east across significant swaths of East Valley cities.

That wave has generated a good deal of social and cultural turbulence in recent years, filling the agendas of neighborhood meetings with issues like day laborers, mobile taco vendors, and conditions of blight and substandard housing that sometimes afflict concentrations of immigrants.

On street after downtown street, significant demographic shifts are not simply changing the city's face, they're challenging old assumptions about who lives and shops where, and who speaks for increasingly diverse communities on issues such as Southwest.

"My question to the community leaders who opposed us," says Gioia, "was, 'Are you speaking just for your little constituency or the entire community?'"

Vencenza, a psychological therapist who is running this year to replace Cody Williams as city councilperson in largely Hispanic District No. 8, insists that when the 2000 census figures arrive, they will reveal dramatic changes in downtown's population.

"I told Tony that he was making some bad assumptions about who lives here right now," she says. "Tony said there's 65,000 Hispanics within a three-mile radius of this area. But that's erroneous. He was going off of the 1990 census. They've moved out. This area has changed."

It's changed all right, but not in the way that Vencenza imagines.

In the past decade, the Hispanic population has jumped from about 40 percent to 55 percent within two miles of the store. Within one mile, the increase has gone from 46 percent to 55 percent, the preliminary 2000 Census results show.

The proliferation of immigrant-oriented businesses tells the story.

"Go east, toward the freeway, and what do you see?" Goia says. "You see a lot of Hispanic jewelry stores. You see a lot of carnicerias. Where are all those people coming from to support those stores if they're not coming from the neighborhood?"

On just about every major street adjacent to the Central Avenue corridor, strip malls and storefronts that verged on going dark a decade ago have sprung to new life as hubs containing carnicerias, botanicas, panaderias, dulcerias and cambios.

This population and retail growth would seem to secure the future of markets like Southwest that have boomed right along with Latino spending power.

Since opening its first store in 1980, Southwest has grown to 32 Hispanic-oriented stores (not counting the seven ABCOs it recently purchased), generating more than $250 million in annual sales.

Yet Southwest expanded when the Latino market was relatively easy to define.

"We had probably 70 to 80 percent concentration of Hispanics in some of our store areas," says Gioia. "That was great for us. We'd take a failed grocery that couldn't compete and simply use our format for Hispanic areas, and it went pretty well."

The new demographics show a dramatic diffusion of the city's traditional Latino concentrations.

"Basically, people are branching out as they fit in," says Gioia. "That means we have to find ways to appeal to more than just the Hispanic consumer, without losing that core group."

The downtown market is the second major crossover effort. The first opened, without a peep from surrounding neighborhoods, at Gilbert Road and Southern in Mesa in May. More are in the works. Their success may hinge as much on social factors as on retail ones.

"This kind of crossover would be no big deal in some other city," says Gioia. "But this is still a Western town market. The idea of diversity is less mature here."

Kendra Vermeer is a willowy, 40-ish blonde whose outward chipperness cloaks what her friend Vencenza characterizes as the soul of a crotchety old man.

"Stubborn doesn't even begin to describe what she is," says Vencenza.

Tony Gioia can attest to that.

Vermeer hasn't set foot in the new SW Desert Market.

"Tony's mad at me," says Vermeer, who is also serving as Vencenza's campaign manager. "He thinks I'm boycotting it and that I'm picking on him."

Vermeer says she'll visit the store when it starts posting its county health scores.

"He always wants to know why I don't ask other supermarkets to post their county health scores. But I've made him the poster boy for the industry for a pretty good reason. His company's at the bottom of the heap when it comes to those health scores. The condition of his stores has been pretty crummy for a long, long time. I just think he should lead the way on some of the issues we've brought up."

Last year, some Southwest stores averaged slightly lower health inspection scores (in the 80s out of a possible 100) than other major supermarkets. That spurred state legislator Ken Cheuvront, who represents the downtown area, to begin thinking about introducing legislation that would require grocery stores to post the scores, just as restaurants are required to do. Cheuvront plans to hold a forum on the issue in October.

In addition to pulling county health scores, Vermeer, Vencenza and a platoon of volunteers fanned out to document evidence of poor management at Southwest stores. They scoured the shelves and perishable sections of its markets for expired and rotted foods. They photographed the parking lots and loading areas.

The pictures portray the front and backstage lives of old markets in poor neighborhoods: parking lots littered with discarded food wrappers and cluttered by shopping carts; loading docks and trash bins heaped with emptied boxes and refuse; potholes brimming murky green with spent floor wash.

Two photographs depict the rear of the former Southwest market at 35th Avenue and McDowell, which burned in March, killing Phoenix firefighter Bret Tarver.

"We took the pictures a week or two before that fire," says Vermeer. "We just wanted people to see the condition of these stores and what we'd be getting if Southwest tried to come in here."

The images showed a tired building with several makeshift add-ons. One structure, consisting of wooden legs supporting a slanted overhang, housed an exposed water heater. The ground beside the heater was strewn with half-crushed cardboard boxes. Elsewhere were scattered plastic bags, food wrappings and clumps of paper soaking in puddles of wet filth.

The conditions in the pictures were not the ones that led to the fire.

Yet the tragedy, which occurred the day before the neighborhood's first meeting about Southwest, helped to galvanize concerns about the chain.

"When people heard about the conditions inside that store," says Vencenza, "I think they woke up a little bit to what we'd been saying about Southwest."

Gioia says complaints about the appearance of some Southwest stores are valid.

"The part that was invalid," he contends, "was that we served bad meat, or we abuse our customers because they don't know any better, and that we run substandard stores and bring in substandard product. That was all bull, all B.S."

But that's not entirely so.

On one expedition to Southwest's 20th Street store, Vencenza and a friend brought home about $50 worth of spoiled and expired food.

"The chicken nuggets had mold on them," she says. "I bought a black ham. This wasn't just rotated stock, where they put things due to expire on the front of the shelf. It was across the board."

She gave the samples to a friend who lives in the neighborhood and works at Channel 5, which featured the purchases on a nighttime news broadcast.

"This is a thing that's our issue," concedes Gioia. "If we are found to have expired food, that is not acceptable. And people have been disciplined severely for what was found in one of our stores."

Complaints about Southwest are not new, or confined to the gentrified crowd.

In the mid 1990s, the Valley Interfaith Project and neighborhood organizers pressed the chain to clean up its act.

Many stores were dirty, their sites blighted by trash and occasionally pervaded by the sickly sweet-and-sour stench of rotting dairy and meat products.

A Southwest spokesman at the time accused the complainers, many of whom were Hispanics, of racism. The charge was bogus.

"I think what happened with them," says a Latino food distributor with ongoing ties to Southwest, "is that Southwest really didn't have to care. They had a lock on the market. A lot of these folks -- remember many of the shoppers are women who walk to the stores from the neighborhoods -- couldn't get a car and go somewhere else. So they were stuck. But I'm telling you, the first chance people got to shop somewhere else, they took it. Southwest is still suffering from that. They got a bad name among Hispanics."

Gioia doesn't turn his back on such complaints.

Over a lunch of fajitas, rice and beans at the food court of his store at 16th Street and Buckeye Road, he says the chain is going through a period of reclaiming its name.

"There was a misnomer for years at our company that Hispanics don't care how clean a store is and how it looks and what kind of service they get. That's not true. They care greatly."

After Gioia's arrival in June 1999, the company tabled plans to expand outside the area and began investing in upgrading its stores.

Says Gioia, "We're remodeling, putting in new floors, new ceilings, new paint, new equipment, brighter colors, a more festive environment. That's what Hispanics like."

The chain has completed 12 thus far.

Gioia, who is an investor in the privately owned Southwest, won't say how much it has spent on upgrades.

Neighborhood leaders say that Gioia put the tab for remodeling the 16th Street store, which reopened about a year ago with a built-in tortilleria, at $500,000.

These moves, along with suspicions about the motives that drove Southwest's downtown opposition, have brought a number of prominent Hispanics to Gioia's side.

"There's been a conflict within me over this," says attorney Ben Miranda, who says he's well aware of Southwest's past problems. "But I don't know where these [neighborhood] people are going with it. You hear this criticism, and your first reaction is to think they don't want us Mexican, us Latinos, in those areas of town."

Early in the uproar, Gioia thought it might help to invite neighborhood leaders on a visit to Southwest's remodeled store at 16th Street and Buckeye. The store -- the flagship of the new improved Southwest -- has a clean, festive interior brightened by colorful wall murals depicting idealized Hispanic life and commerce.

But the visit only raised more concerns.

"We saw the jewelry store and those things," says Vencenza, "and I said to Tony, 'We're telling you that you're going to get a bunch of Anglos asking you, "What's this about?"'"

The group, says Gioia, "basically said, 'We don't want this in our backyard.' Because even though it may look pretty, this stuff is totally foreign."

Only a business fool would want to ignore the potential of the Hispanic purse. Studies put its purchasing power in Arizona at more than $13 billion, a number that represents a 317 percent increase -- the largest in the nation -- over the past decade.

The news is even better for grocers, who estimate that the Hispanic market for food is growing twice as fast as that for any other group. Latino shoppers spend 4.3 percent more of their after-tax income on food than the average American. Their average purchase also tends to be higher. They're more likely to pay with cash, rather than with check or credit cards. So grocers lose less on the transactions. And Latinos cook at home more than most non-Latinos do.

"They average about six at-home dinners a week," says Dr. Louis Olivas, an assistant provost at Arizona State University who specializes in tracking Hispanic commerce. "That means they shop every day, for fresh meat, fresh fruit, fresh vegetables."

These habits are a shot in the wallet to grocers who've been steadily losing their share of the American food budget to the fast foods of the modern heat-and-eat culture.

Rather than being foreign, say grocery experts, the Hispanic trends are a throwback to earlier American ways.

"I would say that Hispanic shoppers have the same values that the general population had 30 years ago." says Mark Barnett, vice president of sales and merchandising at Bashas' Foods, whose 19 metro Food City stores are Southwest's competitors. "Food is more important to them. It's part of their tradition. The whole family goes shopping together. They eat their meals together."

What's more, they prefer the choice and attention that come with over-the-counter, eye-to-eye service.

High-end shoppers pay big bucks to get that kind of attention at AJ's Fine Foods, which is owned by Bashas'.

Everyone else can get it for considerably less at Arturo Lom's Carnicerias Chihuahua on 16th Street.

Beaming from behind the meat case, Lom is a silver-haired, blue-aproned icon of Phoenix's new corner butcher. He arrived from Mexico five years ago and opened the store soon after. His handsome high cheeks and broad features are the outward signs of his Mexican and Chinese lineage. The store reflects his family's entrepreneurial line. His father ran a carniceria in a town in Chihuahua for several decades before Lom took it over and operated it for another 30 years.

He now owns three carnicerias here, all in the central city and all within a hambone's throw of other groceries. One of his stores, on Osborn and Seventh Avenue, is directly across the street from a Bashas' store.

There seem to be more than enough customers to go around.

"That tells you they're providing something the general markets don't," says Olivas.

Pointing to the small aisles of canned and boxed foods across from his meat counter, Lom says he obviously can't compete with the low prices for which larger stores sell such goods. But he doesn't have to.

"They like the quality," he says proudly, in thickly accented English. "And the clean."

His health scores have been consistently in the 90s.

They also like the service.

"People come here because I cut meats how they like it," Lom says. "They want half-inch thick, I cut half-inch. They want three-quarters, I cut three-quarters. That way we talk, make friends."

On a Friday in early July, with traffic hissing along the rain-slicked street outside, business is slow. But it's early afternoon. Later, the trickle of customers will become a flow that won't ebb until Saturday or Sunday, when shoppers are done stocking up for weekend barbecues.

The same holds true at El Tarachi, a larger carniceria that opened several months ago just north of Lom's shop on 16th Street.

"Weekends are the best business," says Hector Rascon, whose family runs a second carniceria in Glendale. "And we get a lot of people before holidays."

Most of Lom's and Rascon's customers come on foot from the surrounding neighborhoods.

Just about every apartment in the neighborhoods off of 16th Street has a small black grill sitting beside its door. After work and on weekends, the apartment lawns, which have been pounded to dirt, fill with families.

"Sometimes it's so many you can smell the meat cooking at night from over there," says Rascon. "The spices we put in the marinated meat can make the smoke so strong."

The long meat cases of both stores hold reddish mounds of ground chuck, chorizo and bulging beef and pork sausages made on site. They also specialize in the thin filets of pork and beef that Latina cooks and barbecuers prefer -- laid out in tidy overlapping stacks of smoked pork chops, and dense red filets of beef cut ranchera and milanesa style.

"Hispanics aren't the only ones who like the meats that way," says Lom's daughter-in-law, Marjorie, who along with Lom's son, Gustavo, runs the family's second store, on Osborn Road. "We've had a lot of other American customers in here who see these thin cuts for the barbecue and like them."

The comfort and "my store is your store" friendliness of carnicerias like Lom's and Rascon's are a throwback to an era when bringing home the bacon was as much a social ritual as a practical one.

The store was the place to catch up on local and family gossip, says Olivas. "It was a central part of the community. You got to see cousins. Moms caught up with gossip about who was born, who got married, who died. Dads caught up with who was working where and what they were doing on vacations. It came to the point where the butcher knew your cut, knew what you wanted without having to say anything."

Such intimacy and service are a far cry from the anonymity and "paper or plastic?" query that typifies the shopping experience at most large modern markets.

Yet, ironically, they exemplify the mood of comfort that Gioia tells people he wants the new downtown store to have.

"I shopped at a neighborhood store with my mom and dad for over 20 years when I was younger," he told an audience of downtowners not long ago. "So I have a sense of what it is to have a local grocery store that satisfies and meets your interests and wants and needs."

He plans to stir the neighborhood's ethnic pot by offering Mexican cooking classes in the store's spice section.

In recent months, he brought in Donna Neill, who heads the grassroots neighborhood organization NAILEM, to advise Southwest on how to make its stores more community friendly.

But it isn't clear whether these and other moves will attract the crossover shoppers for which the store has been designed. Since opening in early June, the store's numbers have been below Southwest's projections. In late July, Gioia asked neighborhood leaders to encourage residents to give the store a try.

"The reality is we know how cross-marketing works," says Gioia. "We do that all the time, getting people to mix and match things. But what we're trying here is cross-ethnicizing. That takes time.

"Two generations ago," he says, "back in the 1940s or 1950s, America wasn't conditioned to like Italian food. Well, in the last 25-30 years, it's become an American cuisine. Latino items are going to go the same route. Just give it one more generation."


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