A May survey from food giant Con Agra Foods showed that 71 percent of Americans said they would "continue the savings habits they developed during the economic downturn" such as cooking at home more often, using coupons and store specials, and cutting back on premium purchases. The time does seem right for consumers to abandon their profligate ways. A Grocery Outlet might carry 4,000 distinct products, versus the 40,000 found on a Safeway's shelves. Even the most loyal customers usually supplement with trips to other supermarkets. Grocery Outlet doesn't offer the "specialty perimeter" of a traditional grocery store - i.e., there is no butcher and no baker. "Even if you prefer Miracle Whip, you might have to settle for Hellman's next week," Lempert said. While it will always have roughly the same proportion of cereal, frozen vegetables and bread, for instance, the brands and package size are likely to vary widely from one visit to another. While fans of "Gross Out" - the store's nickname - enjoy its treasure-hunt flavor, the outlet's "opportunistic sourcing" means its inventory fluctuates widely. They're very intelligent about their relationship with customers, (promoting) the emotional, fun, adventurous side of shopping." "It's like a blend of a dollar store and Trader Joe's. "I love Grocery Outlet," he said one recent afternoon on a tour of its latest addition, a sparkling new store at a strip mall in Pinole. "Supermarket guru" Phil Lempert, the food-trends editor on NBC's "Today" show, is a huge fan. Organic goods and beer and wine are fast-growing categories. In the past decade, Grocery Outlet has evolved beyond its roots as a canned-food outlet into carrying a full line of groceries, including fresh items like produce, meat and milk. "We could conceivably double the size of the company in the next five to seven years, adding about 15 to 20 new stores a year," said co-CEO Eric Lindberg, also 39, grandson-in-law of the founder. It also has stores in Arizona, Idaho and Nevada. Grocery Outlet, which offers about half off supermarket prices by selling manufacturers' excess inventory, rang up 5 million additional customer transactions last year compared with the prior year and has clocked double-digit annual sales growth since 2008.īacked with a new infusion of capital (it won't say how much) from Boston's Berkshire Partners, Grocery Outlet is planning significant growth, including new stores in Pinole, Concord, Dublin, Gilroy and Watsonville this year, as well as expansion in its other core markets of Oregon and Washington. In other words, he hopes recession-spawned frugality will persist, just as thrift became a lifelong habit for Depression-era folks. "Our goal as the economy recovers is to retain these new customers." "The economy has amplified our message to consumers," said co-CEO MacGregor Read, 39, whose grandfather Jim Read founded the chain in San Francisco in 1946, selling government surplus canned goods. Now the West Coast bargain chain is poised to capitalize on the new frugality with a major expansion in California, Washington and Oregon.
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