San Jose's growing Latino population is among the most well-off in the country, so it's no wonder those demographics are attracting more retailers to town.

For a snapshot, consider one of the longstanding epicenters of Latino retail - the intersection of King and Story roads on San Jose's East Side. Once a grim and neglected area, three of the four corners have been modernized with new or updated shopping centers.

The most recent is Plaza de San Jose, a $73.5 million shopping strip that opened in 2005. Built with private and city funds, the 191,500 square foot center has lured both national U.S. retailers and companies from Mexico that see an opportunity to serve the growing number of Bay Area Latinos who fancy goods from back home.

And plenty apparently do. Latinos are now the nation's largest minority group, accounting for one out of every three people in California and in San Jose, according to U.S. Census figures.

Their economic clout is growing fast. This year is expected to mark the first time that Latinos will control more disposable personal income than any other U.S. minority group, according to a recent report from researchers at the University of Georgia. Purchasing power of Latinos in California jumped to $214.5 billion last year, up from $170 billion in 2002, the organization found.

The average household income of Bay Area Latinos is $87,118 - 27.6 percent greater than the $68,278 average income for Hispanic households nationwide, according to Univision. And in San Jose, city data shows the average household income within the five-mile radius of King and Story roads is $90,369.

"The real issue is the maturation of families in our neighborhoods in San Jose and the fact that San Jose's economy is so strong, people have lots of opportunities to make money in this city," said Anne Stedler, senior development officer of the San Jose Redevelopment Agency.

Those are the kinds of numbers that convinced the redevelopment agency to invest $39 million into Plaza de San Jose, while Blake Hunt Ventures, a Walnut Creek developer, poured in another $34.5 million.

Visitors to the plaza are encouraged to look and linger, with park benches set amid outdoor water fountains and palm trees. Some buildings are dotted with colorful Mexican-style tiles; there even are replicas of Mayan-style statues in the parking lot.

Anchor stores include popular American discounters Target and Walgreen's, as well as a Starbucks, Jamba Juice and Wells Fargo, among other businesses. But there are also several well-known retailers that cater directly to Latinos, estimated to be about 60 percent of the area's population. Included are the Ritmo Latino music store and Mexico City-based Calzado Andrea Shoes.

Mexico-based chain Another Latino shop at the Plaza is the Bay Area's only FAMSA store. Opened in 2005, it's the Mexico-based chain's first in Northern California. FAMSA enables its U.S. customers to buy furniture, electronics and appliances in San Jose and have the chain's stores in Mexico deliver the items to the customer's family or friends there.

Mariano Esteva, manager of FAMSA's San Jose store, said the business is drawing working class customers from as far away as Tracy and Fresno, in part because it courts Latino shoppers and lets them pay for their purchases on credit. Sales this year for the San Jose store are 20 percent above last year's, and demand led it to begin deliveries to El Salvador this year and Guatemala in 2006.

The San Jose store also leads all 39 U.S. FAMSA stores in sales per square foot, said Ignacio Ortiz, chief executive of FAMSA USA.

Across the street is the Tropicana Shopping Center, an aging strip center anchored by Tropicana Foods and dotted with barber shops, small Mexican cafes, check cashing stores and independent clothing shops. While a city-led effort to take over and upgrade Tropicana flopped in 2003, the Redevelopment Agency is paying to upgrade facades of the one-story businesses.

On a third corner of King and Story is Mi Pueblo Plaza, named after the Mi Pueblo Food Market at the site. Stedler said a developer has proposed building additional retail space designed to accommodate multiple stores.

Sales soaring All of these changes have led to increased spending by East Side residents who now have more places to shop nearby. Sales reported by the area's merchants have soared, according to the city. With new retailers arriving and more customers buying, revenue for the intersection rose from $3.9 million in 2001, before the widespread upgrading began, to $6.3 million last year, said John Weis, deputy director of the redevelopment agency.

But the Plaza de San Jose is among just a few Latino-theme shopping centers in San Jose. Although Latinos shop at mainstream stores, they also frequently want items not found at typical centers. Many are immigrants and favor brands of clothing, electronics, furniture and other items they were familiar with in their native countries.

"In the 1990s, very few retailers understood the Hispanic market. They saw the low-riders, the deterioration, the vacancies. No one understood the market power that was there," said Stedler.

That's changing.

During numerous meetings with East San Jose community groups before construction on Plaza de San Jose began in 2005, one message resonated loud and clear, according to John Reynolds, vice president of Blake Hunt Ventures, the developer of Plaza de San Jose:

"They wanted a mix of traditional American retailers, but also wanted some element of Hispanic retail. . . . They said they did not want to have to drive five miles to get a Jamba Juice or Starbucks; they wanted one in their own community," he said.

Groceries, for example, are a major expense for Latino households; they spend much more than the average family on groceries and tend to shop for and cook foods fresh daily.

That insight led Al Lujan, co-founder of several grocery stores in California, to open Mercados Suvianda in January, not far from the King and Story retail hot spot. Even with larger Latino food chains, including Mi Pueblo and Tropicana Foods nearby, and mainstream stores like Safeway not far away, Lujan and other investors decided to open a 40,000-square-foot store inside a former Albertsons location at 1070 S. White Road.

`Good area to start' "The concentration of Latinos told us this was a good area to start this concept. We felt there was room for us," said Lujan, who co-founded the Pac 'N' Save chain, now owned by Safeway, as well as a chain of discount grocers in Southern California.

"Their buying power in groceries, as well as their overall buying power, led us to believe San Jose would be a good opportunity," Lujan said. The company plans to open its second Mercados Suvianda grocery later this year in a former Albertsons store in downtown San Jose, near City Hall. That store will also contain a sit-down taqueria and a walk-in QuickHealth doctors' office.

One afternoon this week, shoppers at Mercados Suvianda could have browsed through displays brimming with avocados, fresh cactus leaves or dried pinto beans. A vast array of several varieties of tortillas is replenished daily. Customers at the meat and seafood counterlistened for their number to be called out in Spanish. The counter selection includes pigs feet, beef ribs, catfish heads or pork cushion steaks, which are sliced nearly paper-thin. The store is preparing to open a salsa bar that will be stocked with about a dozen versions of the condiment, all freshly made, as well as a taqueria.

Customers said the items they use in traditional Latino cooking are widely available at other groceries, both Latino and mainstream.

But twenty-something San Jose couple Gladys and Zahori Acero said the low prices at Suvianda attracted them. Looking through the huge display of avocados, Gladys Acero said the selection brought her in, as did the low prices. "It's also close to my home and not too crowded," she said.