Grocery Outlet Eyes Big Expansion in the Los Angeles Area
EMERYVILLE, CA – Grocery Outlet has some big sized plans in 2016, and it all begins in one of California’s largest metropolitan areas.
Poised for impressive gains in the next decade or so, the bargain retailer said that it is looking to open several stores in the greater Los Angeles area, creating hundreds of jobs in this landmark move.
“Our plan is to open a substantial number of stores each year in Southern California over the next several years,” said Melissa Porter, Vice President of Marketing. “But so much will depend on real estate. Our first entry came about because a competitor gave up great locations as they looked to pull back from the market. We’re very opportunistic; we like to take advantage of great deals.”
As we previously reported, Grocery Outlet announced that it would open 14 new stores throughout the Los Angeles area from 2016 and beyond.
Over the past 15 years, the company’s sales have ballooned from $500 million in 2000 to more than $1.5 billion in 2014. That number could be easily doubled or tripled in the next decade, Porter said.
In a market as massive as Los Angeles, Grocery Outlet says that there is untapped potential waiting to be found. The extremely competitive environment, however, is tricky for many retailers to navigate. Haggen, for example, had ventured into Southern California territory after acquiring 146 supermarkets from Albertsons and Safeway but later began implementing layoffs after it had filed for Chapter 11 bankruptcy.
Grocery Outlet executives hope that the key to success in this area is in emphasizing the value that it offers consumers.
“There is a reason we label products with discounts over 50 percent as ‘WOW’ deals,” said Co-CEO Eric Lindberg. “It’s often the first thing shoppers say when they realize how much money they’ll save.”
Each location is also run by an independent operator under an operating agreement, allowing for even greater differentiation between stores.
“Many of our stores are run by husband-and-wife teams, while others are run by father/daughter teams or father/son teams,” Porter continued. “The independent operators set the tone for each store, so you’ll find different deals at every store. They are not the same.”
Today, Grocery Outlet operates more than 225 locations in six states. With these plans for expansion in motion in such a competitive market, it will be interesting to see how well the company performs with its unique consumer value proposition.
