Grocery Outlet, the California-based discount food retailer, has quietly ramped up its growth as competitors like Aldi and Lidl are making much more industry noise. Earlier this year the company opened its 300th store, and 40 new stores are expected for 2019.
Grocery Outlet, which purchased Amelia’s stores in Greater Philadelphia a few years ago, operates stores in Pennsylvania, Oregon, Washington, Idaho, Nevada and California. Southern California represents their largest region, with 70 locations.
According to a recent story in Supermarket News, Grocery Outlet offers 40% – 70% off nationally recognized brands. They purchase from manufacturers that have excess inventory and pass their savings on to consumers. As a result of this opportunistic approach, the lineup of products often varies with each shopping trip. And since the stores are locally owned (not franchised), the product lineup may also vary from store to store. Each owner has the ability to choose what products they want to buy and sell.
“People love to save money, there’s no question,” said Phil Lempert, founder and editor of SupermarketGuru.com. “If you can combine that with a treasure hunt, from a consumer standpoint, it’s great.”
Although the products may differ from week to week, Grocery Outlet’s inventory is predominantly made up of national brands, unlike Aldi and Lidl, who only offer a limited amount of national brands.
Recently Grocery Outlet has addressed its millennial customers, who are often their most vocal shoppers. Millennials seek both value and high quality, as well as an understanding of ‘the experience of the food,” according to Vice President of Marketing Layla Kasha. As a result, Kasha describes a new store in Los Angeles as “modern and hip, focusing on clean lines and a design aesthetic that matches the surrounding area.”
Nationally, the model seems to be working, as Grocery Outlet recently surpassed $2 billion in annual sales, according to Supermarket News.