Grocery Outlet customers can fulfill both “wants” and “needs”

Posted Jan 3rd, 2017

Independent operators enjoy autonomy to make buying decisions for their stores.

You heard it here first: coconut sugar is a hot ticket to keep an eye on, and it’s one of many “off-the-beaten-path” items that Grocery Outlet offers.

The common perception is that discount grocery stores sell only dented cans of food that nobody wants. But Grocery Outlet is different, offering steep discounts on brand name products customers want to buy. The expanded selection of gourmet goodies, such as coconut sugar, establishes Grocery Outlet as the go-to for great deals on all kinds of products — not just canned essentials. Grocery Outlet customers love a deal and will shop many locations to get just that.

Grocery Outlet Franchise NOSH section in store
Grocery Outlet sells more than basic staples. Many locations carry an extensive selection of Natural, Organic, Specialty, Healthy (NOSH) products.

How does Grocery Outlet work?

Eric Liittschwager, an independent operator at Grocery Outlet’s San Francisco Visitacion Valley location, has taken advantage of the coconut sugar in the store to expose his customers to new products and expand their palate. The kind of Grocery Outlet customer that buys the coconut sugar is also likely to add more big-ticket items — premium vodka, ribeye steak — to their shopping cart, Liittschwager has observed. He caters to both “wants” customers as well as “needs” customers, those looking for grocery staples.

Grocery Outlet’s extensive network of qualified buyers procures steep discounts on a wide range of name-brand products in top-notch condition. The product is ordered and merchandised by Independent Operators who run great neighborhood markets and entrench themselves in their communities. The combination of driven Independent Operators and brand name goods at amazing prices often results in growing sales and impressive margins. Since Grocery Outlet splits these dollars with their Operators, there’s no cap on earnings potential.

Independent operators such as Liittschwager have the autonomy to make buying decisions for their store so they can stock up on products that they think will appeal to their cross-section of buyers.

Grocery Outlet offers steep discounts on name-brand merchandise

Rick Leyva, an independent operator at Grocery Outlet’s National City, CA, location, says that his customers especially appreciate that the discounts are on name-brand items they recognize.

Many Grocery Outlet stores also have a large Natural, Organic, Specialty, Healthy (NOSH) section, one that is gaining traction among customers. In fact, Aaron and Alix Crocker of the Lompoc, CA, location moved their NOSH section to a more prominent location in the store after they saw that it was one of the most consistently performing categories.

Similarly, Todd Pruitt of Grocery Outlet’s Paso Robles, CA, store stocks a lot of wine. The store is located in the Golden State’s wine country, and he says customers come in looking for good deals.

Grocery Outlet wine aisle
Grocery Outlet stocks a healthy selection of wines for the discriminating connoisseur.

Grocery Outlet allows independent operators the autonomy to make such buying decisions for their store — whether it’s wine, coconut sugar, NOSH items or bread and meat. The independent operator figures out their product mix based on area demographics.

Because Grocery Outlet offers a wide variety of gourmet foods in its rotating catalog, independent operators can also stock these as draws for customers who love a hunt and appreciate discovering new foods. A wide range of customers and steep discounts on needs and wants products combine to create a lucrative formula for many Grocery Outlet independent operators. After all, says Leyva, “Everybody loves a deal.” Be it on wine or bread.

Learn more about Grocery Outlet

If you’re interested in running a store of your own and would like more in-depth details about the Grocery Outlet independent operator opportunity, download our free information report. You can also learn more by visiting our research pages.

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