How Do I Generate Income?
What makes the Grocery Outlet business plan tick?
Grocery Outlet is all about opportunistic buying, whether by our buyers at the corporate office or by customers at the stores. We’re combing through our lists of thousands of manufacturers and suppliers to find the greatest deals. At the same time, customers are taking advantage of those big buys. The end result is that everyone saves money because everyone is making opportunistic buys.
Grocery Outlet independent operators maximize their profit potential by getting involved in their community, making people aware of the deals that are available at the store, and by learning about their customers so they can order inventory that is popular and fast-selling. Independent operators get the word out by partnering with churches for food drives, sponsoring youth athletics and being involved in their local communities.
We look for people who are highly energetic, enthusiastic about making a difference in the community, strong leaders, and driven to increase their own earning potential by helping those in their community save.
How we find the great deals
Our buyers find great name-brand products at dimes on the dollar from suppliers who find themselves with overruns, surplus inventories, repackaged products and perishable foods. We’ve built strong relationships with many suppliers over the years so that our independent operators can sell great brand-name products at far lower prices than conventional stores.
“The thing that most sets our buyers apart from our competitors’ buyers is our flexibility, speed, and responsiveness to suppliers,” says Steve Wilson, Vice President of Purchasing. “Instead of the suppliers courting us as they do with conventional stores, we’re courting them.”
Our customers are very comfortable with the idea of being opportunistic buyers, and we’re taking advantage of other companies’ natural inefficiencies to become a destination for deals.
With our business model, customers may save up to 60% in comparison to a conventional grocery store. We validate our pricing differences with routine price checks on the most commonly purchased items in both discount and conventional grocery stores.
“Our role is to provide stores with as much variety as we can on branded and unique items,” Steve Wilson says, “while at the same time maintaining our deep discount price image.”
How our independent operators benefit
Experienced independent operators know how to get products into customers’ shopping carts. They study their sales trends and understand what sells well and how much of it to order. They display items just the right way to capture customers’ attention. That ability comes from the five or more years of retail management experience that we require of our candidates, as well as their proven sales and merchandising skills and responsible financial background. Another key attribute of an independent operator is commitment to community involvement — participating in and sponsoring events around the local community is a big part of growing the business. The independent operators become integral parts of their neighborhoods.
Independent operators are leaders in their community and are very active in their stores. They possess exceptional communication skills and an ability not only to hire and train qualified employees, but to engage and inspire their employees to optimally perform at their highest level.
“The absentee independent operator model doesn’t work,” says Ashish Kapadia, a Senior Recruiter at Grocery Outlet. “The operators of our most successful locations dedicate themselves to being in their stores, helping staff, engaging with customers, and merchandising for an amazing bargain shopping experience. Having independent operators willing to dedicate whatever time it takes to ensure that the Grocery Outlet brand shines and customers receive top level service creates an infectious positive culture for their employees and promotes a real team approach to running a store, which is vital in order for a Grocery Outlet to compete with the big grocery store chains.”
Our faith in the independent operator
With Grocery Outlet, becoming an independent operator is not about how much money a prospect has. While an independent operator must meet minimum financial qualifications, our main focus is on identifying candidates that know how to manage and motivate employees and maximize sales at the Grocery Outlet store while maintaining the highest level of customer service. We make large capital investments in retail stores, in inventory and in systems and training. Our tremendous faith in skilled independent operators is demonstrated when we hand over a fully stocked retail store and allow the independent operators the freedom to create their own organization and use our brand to grow a business in their local community.
That’s why we look for candidates with these qualities: a responsible financial track record; passion for retail; entrepreneurial motivation to grow their own business; and a willingness to involve themselves in the community. If those ingredients are there, the candidate should succeed in achieving their own financial goals as an independent operator while helping Grocery Outlet reach our aggressive sales targets.
“All of our stores have the potential to do great” says Vice President of Real Estate Marc Drasin. “Some exceed expectations, and some make less than what we or our independent operator expects, but all stores are in great markets loaded with our core customer base. We do our due diligence before signing a multi-million dollar lease commitment. That is our vote of confidence.”
Our independent operators will tell you that we give them the independence to use their own business acumen and judgment to move our products out the door and turn over their inventory at a rapid pace. Grocery Outlet relies on the creativity of its independent operators to do this.
“Grocery Outlet is not your overseer, but your partner,” says Eric Liittschwager, an independent operator in San Francisco. “They are an integral part of what you do, but they leave you alone. They respect your boundaries. I see it as a great partnership.”