- Grocery Outlet is an “extreme value” retail grocery chain headed toward an IPO.
- We took a tour of a Grocery Outlet in downtown Los Angeles to see what the shopping experience is like.
- Prices are impressively low, but the store offers a modest selection of products in each category, and it lacks amenities like an in-store bakery or butcher.
- Visit Business Insider’s homepage for more stories.
A $US2 billion supermarket chain you’ve probably never heard of is about to go public.
Grocery Outlet isn’t a name that will be familiar to most people, yet the chain operates more than 300 stores in California, Idaho, Nevada, Oregon, Pennsylvania, and Washington. The company is hoping to leverage its profitable, growth-oriented trajectory into a $US100 million IPO, it said in a filing with the SEC this month.
The store’s “extreme value” model has led some to call Grocery Outlet “the TJMaxx of grocery stores.” The chain has posted 15 straight years of sales growth, according to CNN, and the company boasts that 1.5 million shoppers walk through its doors each week. It does all that with no online sales – just a minimal web site that includes little more than a store locator, gift card sales, and a newsletter.
We were curious to see what the shopping experience at Grocery Outlet was like, so we took a trip to a location in downtown Los Angeles.
Here’s what it’s like inside a Grocery Outlet.
The street entrance to this Grocery Outlet was boldly branded in red and yellow with inviting graphics. Let’s go shopping.
Thanks to the architecture of this particular location, the entire store awaits you at the bottom of a large set of stairs that descend from street level. It’s bright and welcoming.
I’m not sure what they usually keep in this display, but it was empty when I arrived. However there were a lot of baskets and shopping carts on hand.
I learned that Grocery Outlet sold much more than just groceries. It straddled the line between a grocery and a general merchandise department store, dabbling in a little of everything, including pet supplies.
This Grocery Outlet found a way to pack groceries, alcohol, toys, gardening, and housewares into just 14,000 square feet — that’s quite a feat, since many grocery stores sprawl from 50,000 to 100,000 square feet.
Though not as committed to bulk items as a warehouse store like Costco, you’ll do well to have a lot of trunk space for multi-packs — like these 24-packs of bottled water.
There’s a little of everything here. I don’t know what a Tamale/Seafood Steamer is, exactly, and I’m pretty sure I’ve never seen one before. But you can buy one here for about $US27.
Pretty much every grocery category is covered, but you won’t find a lot of variety. With only about a half-dozen flavours of Pop-Tarts here, it looks like I won’t be able to satisfy my craving for chocolate fudge.
The spice selection is modest. But what the store does carry, you can survive the apocalypse with — and have some to spare for your ‘return to the surface’ barbecue.
This might be a discount grocer, but it still offers a great selection of ready-to-eat meals.
And that includes some great-looking sandwiches. This $US6 Cuban melt is a mouth-watering bargain lunch choice.
Like the rest of the store, the selection of meats is modest. You can get beef, chicken, or pork, but don’t expect many options on cuts, quantity, or selection.
There’s no in-house bakery here, but you’ll still find a selection of (pre-packaged) pastries and cookies.
Near the checkout, I found a lovely selection of fresh flowers.
There’s even a refrigerated floral case.
The prices are frankly remarkable. Every item in the store displays an ‘elsewhere’ price comparison to give you a sense of the potential savings.
Like Craigslist come to life, you should be open to finding unexpected deals pretty much anywhere. Like these Sharper Image illuminated vanity mirrors, right beside a cart full of minced garlic.
The most important section of any grocery store is the ice cream case. Unfortunately, the selection was meager, stocked mainly with brands I’d never heard of.
This store had perhaps the best-organised collection of vitamins and supplements I’ve ever seen in a grocery store.
There’s no smell of fresh-baked bread coming from the back of the store. But there was a good selection of pre-packaged breads nonetheless.
An end cap near the registers had all the essentials: candy, USB cables, webcams, and headphones.
I don’t have a garden, but I want these things nonetheless.
I’ll take a few of these, too. I could spend all day in Grocery Outlet’s garden aisles looking at the charming sculpture collection.
A respectable portion of the total square footage was dedicated to wine and beer.
I was surprised by the completeness of the collection, including some craft beers.
The veggies all looked fresh and delicious.
This is a genuinely large pile of mangoes. My conclusion: Mangoes are a popular item in this LA neighbourhood.
All the aisles were clearly marked, and the store had its share of organic and gluten-free products.
Where else but a Grocery Outlet’s toy aisle can you find some sort of 3D toy printer, a wooden ‘Connect Four’ game, and a stormtrooper action figure all rubbing elbows?
In a way, it feels a bit like you’re shopping in a warehouse chain. Some aisles have products that are shelved still in the boxes they were shipped in …
… while in other aisles, the shelves themselves look very industrial, like you’re in the stockroom rather than the retail floor.
There is no house brand taking up shelf space — the brands are mostly familiar, even if the selection is limited. If you happen to like what’s on the shelf though, stock up: The savings can be substantial.
Every time I checked a price, I found that Grocery Outlet was right about the savings — the best I could find for a similar package of Velveeta, for example, was about $US2.50 more, making the trip to Grocery Outlet worthwhile.
This is why Grocery Outlet doesn’t take manufacturer coupons. Items on the shelves here are often cheaper than what you can get with a coupon elsewhere.
And by the way, the sweets shelf was stacked with a ridiculous quantity of fresh fudge.
The checkout area is neat and orderly, and I found one set at the front of the store and another at the back, which exits directly into the free parking garage. Free parking is rare in LA.
With warehouse store-like prices without membership fees, I can see why Grocery Outlet has such loyal customers. With limited varieties and no in-store deli or bakery, though, it’s not for everyone.
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