Grocery Outlet Opening 35 Stores in Southern California

[CalItalian]

Over the next 2 years. Bulk of the stores will be in Los Angeles and Orange Counties.
Going to be a LOT of competition (like there isn't already) around here with Aldi coming next year...and whoever ends up with the Haggen stores.

http://www.ocregister.com/articles/groc ... tores.html

[storewanderer]

I don't think Grocery Outlet is much of a threat at all. They will pull a little bit of business from a lot of different places but that will be about it. The two they've opened in my area lately are doing little to no business.

[CalItalian]

Today, Grocery Outlet said they would open 100-150 stores in Southern California
http://supermarketnews.com/retail-finan ... cal-stores

[klkla]

That's great another private-equity owned chain with big plans in Southern California.

“At this point we see no limit to our expansion in Southern California,” he said. “It’s a very densely populated area, with many neighborhoods that interlock, so we plan to push expansion till we achieve saturation.”

That being said their stores themselves are individually owned and operated and maybe they will have an impact in lower-income areas. That's why companies like Ralphs are slowly retrenching to upper income areas and areas where there are greater barriers to entry.

[storewanderer]

I thought about it a little bit more and I think Grocery Outlet will have the biggest impact on 99cents Only. By the same token, 99cents Only co-exists just fine nearby Grocery Outlet in a number of NorCal locations. Generally, the 99cents Only Stores have significantly more business. Grocery Outlet also tends to go into much smaller towns, at least, historically, than 99cents Only. There may be good opportunities in places like Bishop or Tehachapi. The individual owner/operator set up has served Grocery Outlet well in small towns in NorCal, OR, WA, etc. to build a community following. Though, typically, the only competition in those towns is Safeway... not very difficult to co-exist. I'm not sure in fast paced SoCal the owner/operator thing will be something that anyone really cares about...

Someone should remember how Grocery Outlet did in Las Vegas, Arizona, and Utah (hint: out of business). Texas was also a quick failure but that is a very different market.

[J-Man]

Someone should remember how Grocery Outlet did in Las Vegas, Arizona, and Utah (hint: out of business). Texas was also a quick failure but that is a very different market.

They also had a few stores in Orange County fairly recently (no more than two or three years ago) that closed, signalling their exit from Southern California.

There's a sign on a closed Fresh & Easy in Azusa that indicates it's going to become a Grocery Outlet. I find that surprising, as it is MUCH smaller than a typical G.O. store.

[storewanderer]

The new locations opened in Reno and Gardnerville are about 22,000 square feet each. This is smaller than the older locations are.

I have seen some smaller Grocery Outlet locations in the 15,000 square foot range which would be similar to a Fresh and Easy. I actually think the smaller footprint serves them better. I am just not impressed with anything about Grocery Outlet. I don't like buying expired products and the Reno Store, specifically the one on Kietzke Lane, seems to have more expired product than product that is within code. Their prices are not good; comparable items are less expensive at Wal Mart, WinCo, or Smiths. Their service is bad; there is rarely more than one register open no matter how long the line is. The Sparks location isn't much better. The Reno-Lemmon one is well run but still has the same price issues.

I used to like going to Grocery Outlet to find private label items from distant/east coast chains but the thrill is gone.

[storewanderer]

By coincidence I was in both Reno Grocery Outlets the past two days. The one in Lemmon Valley which I went to first looked great and was very well stocked, shelves seemed higher, and had a great mix of items at good prices. Many natural/organic items, nice mix of coffee/tea/k-cups at great prices, decent dairy mix even. There was a lot of wine, wine tasting times posted, and in store announcements about wine percentage off. I didn't find anything expired but did find some short coded items which is understandable. Checkout was efficient and friendly and two employees stocking shelves greeted me as I walked by them.

I went to the other Reno location and the first thing I saw when I walked in was one register open, six people in line, and the cashier screaming for a price check. By the time I got to the second aisle the cashier made a second scream for the price check and then shortly after paged "all cashiers to the front." Looking at the dairy I found numerous expired cheese, yogurt, etc. items. The store didn't have 1/2 the selection of the Lemmon Valley location.

I think if they can get stores to operate like the one in Lemmon Valley they may have a chance to gain a following in SoCal though I am not sure natural/organic type items are what the typical customer who shops in that chain is looking for. They may need a different location strategy than being next to Savers or Big Lots or Harbor Freight Tools if they are looking at that strategy.

[J-Man]

The former Mike's Foods in Duarte (originally an Alpha Beta) is becoming a Grocery Outlet as well. Across the street from the recently closed Ralphs (soon to become a Smart and Final Extra), a Big Lots, Dollar Tree, and 99 Cents Only.

[Jeff]

The former fresh and easy in Azusa on Citrus and Rt 66 is becoming one.