Deconstructing immigrant shopping habits

Immigration is expected to drive U.S. population growth over the next decade, and understanding the shopping habits of these first-generation households is key to capturing their CPG spend, according to a new report from Numerator. 

The report notes that in 10 years, CPG spending by first-generation households in the U.S. could surpass $550 billion, and 40% of brands that overindex with these households are imported from another country. 

“Brands and retailers need to understand the shopping behavior of these first-generation households if they hope to capture a portion of their CPG spend in the years to come,” according to the report. 

Nostalgia is only part of the equation with these shoppers. Thirty-seven percent said they purchase ethnic brands because they are better quality than mainstream brands, while 35% said it represents their cultural taste and experience, 34% said it connects them to their heritage, 33% said the brand has a positive reputation in their community, and 31% said the product uses authentic ingredients. 

Grocery chains are already exploring new ways to accommodate this vast, diverse demographic of new arrivals. For instance, Kroger is piloting two “Asian Experience” stores in North Texas in 2025 to cater to “a population explosion” in Denton and Collin Counties. 

The move poses a challenge to specialty stores like India Bazaar, Mitsuwa Marketplace, 99 Ranch, and H Mart.

A rise in Latino immigration has also prompted the establishment of Heritage Grocers Group, which was launched in 2022 by Apollo Global Management, an asset management investment group that specializes in alternative investments. 

Over the last couple of years, Apollo has amassed a portfolio of Latino-focused grocery chains, including Cardenas Markets, Tony’s Fresh Market, and El Rancho Supermercado.

According to Numerator, 45% of first-generation immigrant households are spending their money at these kinds of non-traditional retail operations, but these shoppers also frequent industry leaders like Walmart. 

Outside of these ethnic-food-focused retailers, first-generation households from Central and South America, Mexico, and the Caribbean favor Walmart, Costco, and Kroger. 

That shifts slightly for those from India and the Philippines, who prefer Costco, Walmart, and Amazon. Similarly, first-generation households from China are most likely to shop at Costco, Albertsons, and Walmart. 

Retailers that are overindexed in the current market in terms of CPG spend include La Bodega Cantina (31% household penetration from first-generation Mexican immigrants), Smart & Final (41% household penetration from Central and South America, and the Caribbean), 99 Ranch Market (47% household penetration from China), Apna Bazar (73% household penetration from India), and Seafood City (55% household penetration from the Philippines).