Keywords: financial savings, earning potential, Latino, Latino buying power, Hispanic Marketing Communication, Florida State University, race, diversity, Felipe Korzenny, Federal Reserve
When it comes to saving money, Latinos are generally not as conscientious as whites but are a little more conscientious than Blacks. That's the conclusion of the U.S. Federal Reserve, reflected in its report, "Currents and Undercurrents: Changes in the Distribution of Wealth, 1989-2004."
Latinos, the report says, were "less likely to be savers than families overall [white families]."
The report, which will be updated with 2007 figures in February, indicated that for Latinos, "The proportion with a saving plan is lower than the figure for all families, but the proportion spending less than their income was nearly the same as that for all families."
Among the top 10 percent of Latino earners in 2003, nearly 22 percent spent more than their income in the previous year, according to the study.
"The proportion that spent more than their income in the previous year is 21.6 percent, a figure substantially higher than for either of the other groups [Blacks or whites]," says the report.
So what are Latinos spending their money on?
"Hispanics over-index in products that have to do with children and babies because of the family-size difference," says Felipe Korzenny, founder and director of the Center for Hispanic Marketing Communication at Florida State University.
"Hispanics over-index in almost all consumer products that have to do with home and food. Money spent on groceries on average is as high as mainstream consumers even though Hispanic income is not as large," says Korzenny. "But because of big families, Hispanics spend a lot on food."
Latinos tend to spend a lot on diapers, formula, baby oil, shampoo, cereal, bakery products, meat, poultry, fish, eggs, sugar and electronics, says Korzenny.
Shopping for Latino consumers is considered a family event. "Hispanics traditionally go to the store with friends and family rather than go alone," says Korzenny.
But some traditional aspects of this culture are changing, as successive generations increase the depth of acculturation.
Latinos are more likely to move to diverse neighborhoods as their income increases, and thus tend to shop less at Latino-owned stores and more at retailers like Wal-Mart.
Latinos who frequent these retail stores also favor convenience foods that make it easier and quicker to prepare meals. Such foods include canned vegetables and fruits, pre-packaged salads and deli foods. In addition, they are more likely to patronize fast food restaurants.
But Korzenny points out that Latinos are not flocking in droves to general market stores for their convenience items.
"A lot of independents are getting big … and they are competing side by side with the big chains," she says. "These stores are doing extremely well and have grown from little corner stores to supermarket chains."
Latino-owned grocery and consumer-goods stores have the advantage of a better knowledge of the Latino-consuming public.
"They are more savvy as to the expectations of the Hispanic consumer and more likely to satisfy the needs of the consumer," says Korzenny. "And the fact that they can talk to them helps. So they talk to them in a more personal way. It's just a more home-like experience."
Click here to read the full Federal Reserve report.
