Discount supermarket Grocery Outlet could see more business as shoppers face high food prices. I visited the store and saw why bargain-hunters love it.


For the year ended April 2022, food prices were up 10.8%, marking their largest 12-month increase since November 1980.



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Source: US Bureau of Labor Statistics

The high prices could drive shoppers to discount retailers instead, and that’s where stores like Grocery Outlet come in.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


In mid-May, analysts at investment bank Cowen said they expect the discounter to be “a relative long-term winner in the value grocery space,” noting in addition that “its value proposition has broad demographic appeal that cuts across a wide spectrum of income levels, ages, and other factors.”

Grocery Outlet calls itself “the nation’s largest extreme value retailer.”

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Source: Grocery Outlet

I decided to visit a Grocery Outlet to see why bargain shoppers love it and how it can help customers save as grocery trips become more expensive.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Right off the bat, the front of the store advertises its steep discounts, drawing customers with the promise of prices 50% off those found at traditional grocery stores.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


The company has an opportunistic buying model.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Name-brand labels offer Grocery Outlet surplus inventory due to occurrences like packaging changes or manufacturing overruns, in which companies produce more goods than they need.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Source: Grocery Outlet

Grocery Outlet then buys the excess items for “pennies on the dollar” and can pass those savings onto consumers.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Source: Grocery Outlet

This allows Grocery Outlet to sell items at 40%-70% less than conventional grocery stores.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Grocery Outlet says most of its stores are independently operated by local families. A sign in the wine and beer section at my store proudly declared this was the case there.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


As a result, product selection can vary greatly by store.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


When I visited, there were large signs throughout the store indicating the various big-name brands that supply products there, like these.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Grocery Outlet signed its first supplier agreement, with Del Monte, in 1971.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Today, it works with more than 2,500 brands.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Source: Grocery Outlet

Its top suppliers include household names like Kellogg’s, General Mills, Kraft, Nestle, Unilever, and Procter & Gamble.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


When it comes to a lot of common staples, however, many items can’t usually be sourced opportunistically, like milk…

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


In these cases, Grocery Outlet sources these products just like other grocery stores but tries to price them at or below the competitors’ lowest price.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


This is meant to help shoppers finding a good bargain make sure they can also get everything they need in one trip.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Source: Grocery Outlet

Grocery Outlet has had plenty of time to become, as it calls itself, “one of the largest opportunistic buyers of grocery items in the country.” The company’s history dates back to 1946, when founder Jim Read opened the first store.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Source: Grocery Outlet

Located in San Francisco, the store was called Cannery Sales.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


It sold military surplus items at heavily discounted prices.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Grocery Outlet didn’t start selling fresh produce until 1999. On my visit, I found some deals were particularly good when it came to organic produce (I’m looking at you, avocados).

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


There was also a great deal on watermelon with summer just around the corner. These were regular-sized for sale at the price of some personal-sized watermelons.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Up next was the meat section.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Many of the items here had orange stickers denoting their prices were reduced for quick sale. This made some products an especially good deal, if you could use them in time before they expired.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


And though Grocery Outlet has been around for decades, the company didn’t start selling fresh meat until 2003.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Source: Grocery Outlet

Nearby, there was an aisle devoted to what Grocery Outlet calls the “NOSH” section.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


NOSH stands for “natural, organic, specialty, healthy.”

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Products here included everything from coconut flour and spirulina to snack bars and even watermelon jerky (not pictured here), which was new to me.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


As I walked through the store, I saw a lot of products still stored in the cardboard packaging they came in.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


This can help the company save on the costs of labor for workers stocking shelves.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Besides groceries, the store had plenty of other products, including household items like this sharply discounted toilet paper…

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


…and this assortment of laundry detergent.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


There was a section for beauty products, personal care items, and toiletries.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


This area had some of the biggest discounts in the store.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


There was a small clothing section in one corner of the store, although some boxes were left on the sales floor nearby.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Some clothes had piled up into a small heap.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


One area had a small selection of kids’ toys.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


…outdoor items and pet products.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


I went to the store in mid-May, a full month after Easter, but found some merchandise still lingering from the holiday, on clearance.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


There were also heart-shaped Ding Dongs from Valentine’s Day.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


In the same aisle, I even saw some Oreo knock-offs from fellow grocer Food Lion.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


As I walked through the store, I saw empty shelves from time to time.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


Inventory can change very quickly at Grocery Outlet stores because of the company’s opportunistic buying model.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


As a result, many deals can be one-time only.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


After visiting the store, I can see why bargain-hunters love it.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


If you enjoy hunting for bargains, Grocery Outlet could be a great place to shop because you never know what deals you might find.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider


And I found that many of the items were in fact priced lower than I’d probably see elsewhere, which could very well attract more shoppers as inflation remains high.

a Grocery Outlet Bargain Market store



Sarah Jackson/Insider




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