The Grocery Outlet Story

Matching supply and demand for bargain markets created unique business opportunity

MacGregor Read and Eric Lindberg are third-generation members of the Read family, who started this company and led it to become the almost $2 billion business that it is today. MacGregor and Eric became co-CEOs in 2006, and the values of the family business are deeply ingrained in them both. Follow them on a store visit and you’ll see them round up shopping carts and face the shelves. They grew up in this business, they are passionate about it and today they are leading Grocery Outlet toward an even greater future.

“The company has endured the test of time,” says MacGregor. “It was not just the Read family, but also the dozens of families inside this business who play a significant role in who we are.”

The early days with founder Jim Read

the first person to start a grocery store with Grocery Outlet

Grocery Outlet has evolved dramatically since Jim Read sold excess surplus food products in San Francisco nearly 70 years ago. He began this outlet operation in 1946, calling it Cannery Sales. When he grew to having three or four stores, he came up with the idea of having families individually operate them. In that model, it became more efficient and effective to have others concentrate on the selling while he did the buying. In 1973, that idea was written out on a napkin — the contract Jim made with his first independent operator, Leonard Downs of Redmond, Oregon.

starting a grocery store on the back of a napkin!
The original Grocery Outlet contract written on a napkin

The arrangement became the consignment operation we still use to this day, where Grocery Outlet buys and independent operators sell the products that customers purchase. This business model has paved the way for our buyers to purchase quality, name-brand items at significantly lower prices so that our independent operators can make them available at discount value.

Jim accomplished a lot before his death in 1982. He acquired an interest in Big Bonus Foods, a Bay Area chain stocked with regular and surplus merchandise; he acquired Globe of California; he converted his business to a seller of factory seconds, closeouts, and discontinued products; he changed the store name to Canned Foods; and he signed the first supplier agreement with Del Monte.

Grocery outlet history. Our look has evolves a lot since the early days.

The next generation

It took three generations for Grocery Outlet to become what it is today, and there are no plans to slow down.

Jim’s sons, Peter and Steven, who cut their teeth on the family business, stepped in shortly after their father’s death to take our company to the next level. They had already played a big role in the company’s leadership throughout the 1970s, and during their leadership tenure the brothers formed relationships with consumer packaged goods companies (CPG) from all over the country. The Read brothers added frozen food, dry grocery, dairy, deli, fresh produce, and frozen meat categories.

Grocery Outlet makes it easy to open a grocery store for experienced grocery managers and retailers.

By 1995 the 100th store opened, but the milestones didn’t stop there. Our sales soared in 2001 after we bought the inventory of two online grocers that failed when the dot-com bubble burst. The resulting publicity — “Internet hotshots bought out by discount grocer” — boosted us toward becoming a $500 million company.

We continued to rebrand our image in the final days of the brothers’ management, and their two decades of leadership resulted in a $600 million business. The corporate name changed from Canned Foods Inc. to Grocery Outlet Inc.

A new era

In 2009, the Grocery Outlet Bargain Market format was introduced to better reflect our evolution into a neighborhood market with great deals in produce, meat, and brand-name goods. In 2011, we introduced “Lois Prices,” our spokes-puppet and low-price & happiness ambassador. She and her Frugal Friends deliver the message that shopping is fun at Grocery Outlet.

you too can start a grocery store with a produce department like this!

With Lois Prices and her Frugal Friends, our presence in the community continued to flourish. Jeannie Calkins, a marketing director and an employee for more than 25 years, initiated the “Independence from Hunger” food drive to benefit families facing financial difficulties. During our initial campaign in 2011, we raised $223,000 in cash, gift cards, and food donations. Helping those less fortunate than ourselves has always been a big part of who we are.

In 2009, Grocery Outlet was acquired by Berkshire Partners. Together we embarked on a massive phase of expansion. By 2012, we acquired Amelia’s Grocery Outlet, a value grocery chain in Pennsylvania, and in the following year we opened our 200th store. Our recent growth is spurred, in part, by Hellman & Friedman, a private equity group that acquired Grocery Outlet from Berkshire Partners in 2014 and recognizes the continued growth opportunity for discount grocers. Together we look to aggressively open more Grocery Outlet Bargain Markets to serve new neighborhoods and new cities and spread the word about the Grocery Outlet brand.

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