The seven Los Altos Ranch Markets in and around Phoenix served more than 6 million customers last year.
That number speaks to the affinity shoppers have for the banner, according to Prabash Coswatte, chief operating officer of Los Altos’ parent company, Heritage Grocers Group, based in Ontario, California.
The first Los Altos store in Phoenix opened in 2002. The banner had grown to seven by 2017, when it was purchased by Cardenas Markets, which kept it intact because “the Los Altos brand means a lot to the community,” Coswatte said. “It is trusted, it is valued. They go, ‘That’s my store.’ We didn’t want to change that. We’ve seen continued growth, and I really think it goes back to brand loyalty.”
Heritage Grocers has been systematically upgrading the Los Altos stores – five in Phoenix and one each in Glendale and Mesa – over the past three years, spending more than $10 million, Coswatte said.
It was three years ago that Los Altos and Cardenas were purchased by investment firm Apollo and combined with the firm’s Tony’s Fresh Market stores in Chicago to form Heritage Grocers Group.
With the addition of El Rancho Supermercado stores in Texas and Kansas in June 2023, the group today comprises 115 stores under those four Hispanic- and ethnic-focused banners.
Coswatte said customers are giving good feedback about the changes in the Los Altos stores, which include new lighting and other improvements.
“When you go to a Los Altos store, the look and the feel is very different than when you go to a Cardenas store or an El Rancho store. We wanted to keep that look, feel, authenticity,” he said.
But its ties to the Cardenas banner also are detectable. California transplants arriving in Phoenix who shop at Los Altos will see Cardenas-branded products on the shelves, “helping us build our consistent customer growth,” Coswatte said.
That growth means “we’re always looking to open and expand in Phoenix,” he added, noting that the city’s population continues to grow as jobs in construction and other industries increase.
Until new opportunities present themselves, Heritage will continue to upgrade the stores, “because next to investing in our people, the next best thing we can do is invest in our stores. The infrastructure makes it more pleasant for our team members and our customers, so we continue to invest.”
Fresh matters
While Los Altos Ranch Market shoppers are predominantly Hispanic, many with Mexican heritage, the fresh departments draw in others as well, according to Coswatte.
“Because of the amount of fresh produce, meat, cheeses, spices that we have, people love coming to shop with us who are Anglo, Asian… We have a broad customer base,” he said.
Los Altos stores range in size from 40,000 square feet to 75,000 square feet. In addition to the fresh departments, they also feature full-service seafood departments (that will fry customers’ fish purchases for free, a service unique to the Arizona stores). 
Shoppers also will find a tortilleria with fresh corn and flour tortillas made daily from scratch; a bakery department with specialty pastries, desserts and cakes and freshly baked pan dulce and bolillos; and an in-store Cocina where customers can sit and enjoy Los Altos Ranch’s signature carnitas and Daily Deal meals.
But there’s more.
With Phoenix’s warm (and sometimes hot) climate, Los Altos has begun to introduce La Michoacana Ranch Market, a counter that offers ice cream, popsicles, juices and other sweet treats, as well as nachos, fries and other foods.
“It has been a big hit all times of the year in Arizona, and we’re looking to add more of those into our stores,” Coswatte said. “We’re always looking to invest and increase the assortment and the excitement.”
The excitement factor in Los Altos stores is important because Hispanic customers tend to view grocery shopping as a family event rather than a quick shop, he noted. And that means the stores need to keep all ages in mind.
Kids might migrate naturally to the Michoacana, while dad may be drawn to carne asada for the grill or the chorizo Los Altos is known for, Coswatte said.
The Cocina also is a draw for families and others; Coswatte says there are many loyal customers at breakfast, lunch and even dinner.
“Everybody sits in a very communal environment. It’s something that you don’t see, especially in a post-COVID environment. But it sparks up a little bit of conversation … back to the community feel,” he said. “Our Cocina is definitely a differentiator for us – some of [them] outperform most of our other stores.”
Heritage Grocers Group also utilizes one of the Los Altos stores as a commissary for 65 of its stores (Los Altos plus Cardenas Markets in California and Nevada). The commissary produces items like tortilla chips and bunuelos (fried dough fritters), and that production adds a “more hustle and bustle” to that store, he said.
“You get the aroma of the bunuelos being fried, and it’s a sensory experience.”
Value proposition
Asked what Los Altos Ranch Market shoppers find important in their shopping experience, Coswatte said: “People are always looking for value, right? We lead with customer service, and then we lead with products – products that differentiate us.
“Produce, we consider the tip of our spear. So when customers come in, they go, ‘Wow, this is a quality product. I can take it home and it’s going to last in the refrigerator. I don’t need to eat it today, tomorrow because it’s going to expire’. So, I think we lead with freshness, authenticity and value, because customers need to perceive value.”
The first thing Coswatte does every morning, at 4:30 or 5:30, is to look at every customer review from the previous day across all four of the company’s banners.
“When I see the customer feedback, I know what’s going on beyond the numbers. Sales numbers tell me one thing, the movement numbers tell me something. But then the true customer feedback, that’s gold, right? You need to listen to it. And as an operator, that’s the most important thing.”
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Supporting the community
Though based in California, Heritage Grocers Group supports the local community in Phoenix.
Coswatte, who has been with the company for five and a half years, said he was privileged to be a part of a check presentation in Phoenix a few years ago.
“We want to make sure we are part of the community; that’s important to us,” he said, adding that Heritage is a member of the Arizona Food Marketing Alliance.
In addition to AFMA, Los Altos is a supporter of organizations such as Phoenix Children’s Hospital, Phoenix Children’s Project, The Armer Foundation For Kids and St. Mary’s Food Bank Alliance.
Supporting the team
After the Cardenas acquisition in 2017, some original Los Altos team members elected to stay, and some continue working at the stores today, Coswatte said. They are an invaluable source of information about local customers and sometimes help guide marketing efforts.
“We are fortunate; we have some amazing, amazing beautiful team members who make everything come true. At the end of the day, without them we’re nothing,” he said.
To help hold on to team members, Los Altos has “overindexed in the Phoenix area investing in employee compensation. I’m confident about saying that,” Coswatte said. Other benefits include employee discounts, a uniform program and a competitive health benefits package.
Heritage recently created a district trainer role, and there is a designated training store in Phoenix. It’s also launching, in the very near future, a team member recognition program as another way to express its thanks.
“We do think about our team members and go, ‘How can we make a difference? How can we make excitement around it?’ I think that really helps with the engagement, the retention and reduces the turnover. And when you reduce the turnover and keep the engagement, [you have] happy employees, [which] means happy customers.”
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