Description

Hispanic consumers of all incomes are drawn to the value offered by mass merchandisers and now is the time to draw less brand loyal and more discerning consumers.

Stefanie Kundakjian, Research Analyst

Table of Contents

  1. Executive Summary

    • What you need to know
    • Consumer trends: key takeaways
    • Market predictions
    • Opportunities
  2. TARGET AUDIENCE OVERVIEW

    • Hispanic consumers by the numbers
    • A growing share of the population is Hispanic
    • Graph 1: percent of US population, by Hispanic origin, 2018-28
    • Graph 2: generation distribution, by Hispanic origin, 2023
    • Hispanic consumers live in larger households and are more likely to have children in the home
    • Graph 3: households with related children under the age of 18 living at home, by Hispanic origin, 2021
    • Graph 4: average number of people per household, by race and Hispanic origin, 2021
    • Hispanic consumers are more prevalent in specific states and split between urban and suburban areas
    • Graph 5: type of area where Hispanic consumers live, 2024
    • Hispanic consumer finances
    • Labor interruptions during COVID-19 are largely in the rearview mirror
    • Graph 6: Labor Force Participation and Unemployment Rate, by all and Hispanic, 2019-24
    • Hispanic consumers' median household income has been steadily increasing; household income impacts shopping frequency
    • Graph 7: median household income (% annual change), by Hispanic consumers vs all, 2011-20
    • Hispanic consumers' buying power will climb to $2.8 trillion in 2026
    • Culture, as well as household income, play a role in shopping habits
    • Graph 8: median household net worth, by Hispanic country of origin, 2020
    • A greater share of Hispanic consumers' annual expenditures goes toward food at home and other household necessities
    • Graph 9: average annual expenditures (% share) – select items, by Hispanic origin, 2022
    • Mean annual expenditures for key categories are not dissimilar for Hispanic and off non-Hispanic consumers
    • Graph 10: average annual expenditures (mean $) – select items, by Hispanic origin, 2022
  3. MARKET DYNAMICS

    • Market context
    • The majority of Hispanic consumers consider themselves less brand-loyal now due to higher prices, creates opportunities for store brands
    • Graph 11: "I am less loyal to brands right now due to higher prices," by Hispanic origin, 2023
    • Brands may have to work harder to gain loyalty among Hispanic consumers
    • Hispanic consumers find value in mass merchandisers, but there's a need to stay competitive with dollar stores and discount stores
    • Graph 12: retailers shopped by Hispanic consumers – any shopping (net), 2023
    • Supercenters and warehouse clubs make up the bulk of the mass merchandiser market
    • Graph 13: total US retail sales and forecast of mass merchandisers ($ bn), by segment, at current prices, 2018-28
    • Market drivers
    • Hispanic consumers are finally experiencing some relief at the checkout counter
    • Graph 14: Consumer Price Index change from previous year, 2021-23
    • While consumer sentiment is up, they are split between spending and being cautious
    • Hispanic consumers, for the most part, are financially stable showing an increase in those who have a healthy financial situation
    • Graph 15: assessment of personal financial situation, 2022-24
  4. Consumer Insights

    • Consumer fast facts
    • Retailers shopped and shopping method
    • Omnichannel engagement is key with Hispanic consumers as they shop online and in-store at higher rates than the general population
    • Graph 16: retailers shopped at in past 12 months – NET, Hispanic consumers vs. general population, 2024
    • Hispanic consumers shop online and in-person, but prefer to shop in-person
    • Graph 17: attitudes towards shopping in-person and online, 2024
    • In-store shopping continues to be the preferred method of shopping, as Hispanic consumers crave brick and mortar experiences
    • Graph 18: retailers shopped at in past 12 months (in-person), Hispanic consumers vs all, 2024
    • Amazon continues to dominate online retail, but mass merchandisers with online presence keep apace
    • Graph 19: retailers shopped at in past 12 months (online), Hispanic consumers vs all, 2024
    • The Amazon effect raises the bar for all mass merchandisers, but there's opportunities to remain competitive especially with higher earners
    • Consumers start their shopping journey at mass retailers, pointing to the importance of a seamless purchase journey alongside appealing to value
    • Graph 20: behaviors towards shopping – first stop a mass merchandiser, 2024
    • Gen Z and Gen X are more likely than their general population counterparts to start their shopping journey at a mass merchandisers
    • Graph 21: behaviors toward shopping – first stop a mass merchandiser, by Hispanic consumers vs all, by generation, 2024
    • Parents are busy consumers trying to do it all; meet them where they are at and ensure seamlessness and convenience
    • Graph 22: retailers shopped online in past 12 months, by parental status, 2024
    • Reasons for shopping at mass merchandisers
    • Differences between Hispanic consumers and the general population points to opportunities to stand out from the rest
    • Graph 23: reasons for shopping mass merchandisers, by Hispanic consumers vs all, 2024
    • Hispanic consumers don't want to compromise on quality, are looking for a fair price and products they can trust
    • Graph 24: top reasons for shopping at mass merchandisers (select up to 5), 2024
    • A product's price must be competitive and reflect the quality they expect
    • Graph 25: attitudes towards mass merchandisers – quality vs price, 2024
    • Room to engage with Hispanic Gen Z women with private label
    • Graph 26: reasons for shopping mass merchandisers – "good quality store brands," by Hispanic vs all consumers, by gender and generation, 2024
    • Retain higher-income earners through product selection
    • Graph 27: top reasons for shopping mass merchandisers – "product selection" (select up to 5), by household income, 2024
    • Lean into everyday value, wide selection of items for the whole family, and an enjoyable in-store/online experience
    • Affordable prices, products for the whole family and enjoyable in-store experience are top motivators for in-store mass merchandiser shoppers
    • Online mass merchandiser shoppers cite similar reasons for shopping with these retailers compared to in-store shoppers
    • Items purchased
    • Hispanic consumers are highly engaged across all categories at mass merchadisers, but there's room to grow food/beverage and BPC purchasing
    • Graph 28: items purchased at mass merchandisers – NETs, Hispanic consumers vs all, 2024
    • Cater to family needs to attract and retain Hispanic consumers who are more likely to have children in the household
    • Graph 29: items purchased at mass merchandisers – electronics and toys/games, by Hispanic consumers vs all, 2024
    • Graph 30: items purchased at mass merchandisers, 2024
    • Men are more likely to purchase electronics, women buying toys and games
    • Graph 31: items purchased at mass merchandisers, by gender, 2024
    • While a majority of Hispanics across generations buy BPC from mass merchandisers, Millennials buck the trend
    • Graph 32: items purchased at mass merchandisers – any BPC – NET, by Hispanic consumers vs all by generation, 2024
    • Lean into fashion-forward and identity-expressive apparel akin to their own preferences to draw Hispanic parents
    • Graph 33: items purchased at mass merchandisers – any apparel – NET, by parental status, 2024
    • Hispanic men are stepping up the fashion
    • Millennial Hispanics underindex for household essentials; attract this generation with promotional offers and natural ingredients
    • Graph 34: items purchased at mass merchandisers – household essentials, by generation, 2024
    • Room for "Spanglish" and other cues outside of language since English speakers more likely to shop for food/beverage
    • Graph 35: items purchased at mass merchandisers – any food or beverage – NET, by language preference, 2024
    • Highlight furniture and home decor in marketing to younger women who are significantly more engaged
    • Graph 36: items purchased at mass merchandisers – any furniture & home décor – NET, by gender and age, 2024
    • Interest in buy now pay later can help consumers make purchases in categories they feel are more discretionary
    • Graph 37: attitudes toward mass merchadisers "I am interested in using flexible payment options," by generation, 2024
    • Importance of omnichannel apparent by the nearly identical share of consumers who shop online and in-person
    • Graph 38: items shopped at mass merchandisers, in-store and online, 2024
    • Retailer and brand loyalty
    • , Mass merchandisers have done well in being a go-to shopping destination, sustain loyalty through collaborations and store brands
    • Graph 39: mass merchandiser behaviors – do most shopping at one retailer, Hispanic consumers vs all, 2024
    • Collaboration drives loyalty: spotlight on Millennial Lotería
    • Spanish speakers are more loyal to one mass merchandiser and are more likelty to switch to store brands, but risks for shopping around exists
    • Graph 40: mass merchandiser behaviors – loyalty and switching, by language preference, 2024
    • Hispanic consumers spend a larger share of their household income on necessities and will be more sensitive to inflationary pressures
    • Graph 41: mass merchandiser behaviors – switching to store brands, Hispanic consumers vs all, 2024
    • Retailers can address the ways Hispanic consumers are shopping at a time when budgets aren't going as far as they used to
    • Parents more incentivized by paid loyalty membership benefits, but indicate needing more support to understand benefits/value
    • Graph 42: paid loyalty memberships – factor in deciding where to shop (select up to 5) and attitudes toward (any agree), by parental status, 2024
    • Parents tend to make more impulse purchases when shopping at mass merchandisers
    • Graph 43: behaviors towards mass merchandisers – impulse purchases, by parental status, 2024
    • Desired improvements
    • Hispanic consumers value a variety of quality products at good prices, including more Hispanic brands, and appreciate coupons
    • Graph 44: desired improvements, 2024
    • Hispanic consumers are happy with the quality of store brands and want more environmentally-friendly shopping options
    • Graph 45: desired improvements, by Hispanic consumers vs all, 2024
    • Savings should be accompanied by wider Hispanic/Latino product offerings and shorter checkout lines to attract eight in 10 Hispanic consumers
    • Personalized promotions/coupons are the top fact that would encourage increased shopping frequency at mass merchandisers
    • Hispanic consumers of Mexican and Central American origin/descent want expedient shopping experiences
    • Graph 46: desired improvements – shorter checkout lines, by country of origin/descent, 2024
    • Investing in cashier innovations can drive loyalty: spotlight on Aldi Süd
    • Higher household income earners want more Hispanic/Latino brand offerings
    • Graph 47: desired improvements – more Hispanic/Latino ingredients and products, by household income, 2024
    • Hispanic consumers are attentive to corporate responsibility, need transparency and clarity around retailers' ethics
    • Graph 48: attitudes towards mass merchandisers – corporate social responsibility, 2024
    • Hispanic parents want help to be more sustainable; provide sustainable products/services that align with values
    • Graph 49: attitudes towards mass merchandisers (any agree) – corporate social responsibility, by parental status, 2024
  5. Competitive Strategies

    • Competitive strategies and market opportunities
    • Launch of revamped Target Circle/Target to launch paid membership program to rival Amazon Prime, Walmart+
    • Enhancements to in-store experience: Walmart
    • Customers asked for expansions to private label and Target listened
    • Opportunities
    • Lean into in-store experiences to retain omnichannel consumers
    • Revolutionize the in-store experience through strategic tech investments
    • Enhance interactivity with products with immersive online experiences
  6. Appendix

    • Market definition
    • Consumer research methodology
    • TURF methodology
    • Generations
    • Abbreviations and Terms

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