Grocery Outlet Mid-Atlantic Expansion

[marketreportblog]

Grocery Outlet seems to really be committed to their plan of expanding in the Mid-Atlantic region. There have been a lot of openings in the last few years:

2021

• East Norriton, PA Feb 2021

• Philadelphia, PA/Mount Airy Apr 2021

• Delran, NJ Dec 2021

2022

• Philadelphia, PA/Welsh Rd Feb 2022

• Philadelphia, PA/W Oregon Ave Mar 2022

• Hamilton, NJ Apr 2022

• Lansdale, PA Apr 2022

• Hagerstown, MD Jun 2022

• Philadelphia, PA/Sharswood Jul 2022

• Allentown, PA/Allen St Oct 2022

• Elkton, MD Nov 2022

• Lebanon, PA Dec 2022

• Mechanicsburg, PA Dec 2022

• Salisbury, MD Dec 2022

2023

• Hazlet, NJ Feb 2023

• Philadelphia, PA/Fishtown Mar 2023

• Edgewood, MD Jun 2023

• Philadelphia, PA/Woodhaven Jul 2023

• Catonsville, MD Sep 2023

• New Castle, PA Oct 2023

• Boardman, OH Nov 2023 (barely Ohio, right at the PA border)

• Eldersburg, MD Nov 2023

• Glen Burnie, MD Nov 2023

• Owings Mills, MD Dec 2023

• Rio Grande, NJ Dec 2023

• Uniontown, PA Dec 2023

2024

• Jamison, PA Feb 2024

• Mays Landing, NJ Mar 2024

• Parkesburg, PA Mar 2024

Opening soon:

• Rehoboth Beach, DE Apr 4, 2024

• Gibbstown, NJ

• Overlea, MD

• Sicklerville, NJ

• Toms River, NJ

• Plainsboro, NJ

• Pottstown, PA

• Philadelphia, PA/University City

• Colerain, OH (western OH)

• Union, OH(western OH)

Regions they've announced expansion for:

• Pittsburgh, PA

• Albany/Upstate NY

That's an awfully fast expansion, obviously not as fast as a more established chain like ALDI but other than ALDI, who else is growing this quickly in the Mid-Atlantic area? So far response seems to be largely positive, although quality of individual stores seems to vary significantly. It also seems that the rotating selection of random items turns some customers off, with several reviews talking about preferring LIDL or ALDI with no name brands but a stable selection. In a relatively short time, they've reached pretty much a critical mass in this area, and they seem to continue to be looking to expand.

As far as competitors go, Save-A-Lot is all but irrelevant these days, and ALDI continues their growth. I still can't quite figure out LIDL, as it simultaneously seems like they are finally hitting their stride while they're still laying people off. As far as I can tell, they've opened two stores so far in 2024 (NYC and DC area), and no more are scheduled to come in the near future. Fully built stores in Baltimore, MD and Livingston, NJ have sat vacant for over a year. It seems to be like LIDL's expansion has slowed significantly, but also that their existing stores seem to do quite well with a few exceptions. (Oh, and they're adding seasonal outdoor garden centers.) We'll see if Grocery Outlet can continue their expansion, and if it'll stick.

[BatteryMill]

I do wonder how Grocery Outlet can pull such an expansion so far from home and in strong Aldi/Lidl territory, though I wish them good luck.

Lidl is under construction in Centreville, VA. The new Hyattsville store was a PriceRite and before that a longstanding Giant, of which Queen Elizabeth II visited early in her reign.

[mbz321]

IMO, they are growing too quickly and they don't have enough merchandise to fill their stores with. I popped in a few times to the new location in Jamison and it was very underwhelming. Unless they were incredibly busy earlier in the day, the shelves were quite light throughout and most of the merchandise felt like cheap stuff that is carried everyday (not unique to this location). I had a $5 off $15 grand opening coupon and even then it was hard to find $15 worth of stuff to buy. Also some of the produce seemed to be in not-so-great of shape, even for the price. The store also felt larger than it had to be, despite taking about half of a 50k foot former traditional grocer (the other half went to Planet Fitness), and it was very overstaffed for the volume of business at that time of night. Not sure how well this particular location is going to do, especially since this is a very upper middle-class area.

[BillyGr]

I do wonder how Grocery Outlet can pull such an expansion so far from home and in strong Aldi/Lidl territory, though I wish them good luck.

Don't forget, they actually bought an existing chain (Amelia's Grocery Outlets) in PA as the starting point to this, so it's certainly possible that they gained something from those who were involved in the chain when they purchased it to help with expanding in this region.

[buckguy]

A few annotations and observations:

Colerain= Cincinnati area - NW suburbs
Union = Dayton area
Boardman = Pennsylvania is irrelevant; it's suburban Youngstown and is a major retail hub; this is the same media market as New Castle, PA

Several Maryland stores are in the Baltimore area (Owings Mills, Glen Burnie, Catonsville); Baltimore and Philly areas are the clearest metros, they're seriously entering. They are off to odd starts in Dayton and Cincinnati--not the fast growing areas. One wonders where the distribution will be and who it is---S and E of Pittsburgh you have to deal with mountains and towns that have been losing population since the 1950s.

[storewanderer]

IMO, they are growing too quickly and they don't have enough merchandise to fill their stores with. I popped in a few times to the new location in Jamison and it was very underwhelming. Unless they were incredibly busy earlier in the day, the shelves were quite light throughout and most of the merchandise felt like cheap stuff that is carried everyday (not unique to this location). I had a $5 off $15 grand opening coupon and even then it was hard to find $15 worth of stuff to buy. Also some of the produce seemed to be in not-so-great of shape, even for the price. The store also felt larger than it had to be, despite taking about half of a 50k foot former traditional grocer (the other half went to Planet Fitness), and it was very overstaffed for the volume of business at that time of night. Not sure how well this particular location is going to do, especially since this is a very upper middle-class area.

If they get the right merchandise they can do very well in an upper middle class area. But lately "getting the right merchandise" seems to be a significant challenge.

The staffing issue will correct itself since the operators can't staff if they aren't making sales. No money for payroll...

My purchases with them have been way down lately. Never know what I'll find but a lot less excited by my purchases lately than I was last year.

To use those $5 off $15 coupons to get to the $15 I can usually backfill the transaction with pet food, shredded cheese, or potentially a container of ice cream or some other frozen item. While those items aren't really a great price, factoring in 33% off, it comes out pretty good.

[storewanderer]

A few annotations and observations:

Colerain= Cincinnati area - NW suburbs
Union = Dayton area
Boardman = Pennsylvania is irrelevant; it's suburban Youngstown and is a major retail hub; this is the same media market as New Castle, PA

Several Maryland stores are in the Baltimore area (Owings Mills, Glen Burnie, Catonsville); Baltimore and Philly areas are the clearest metros, they're seriously entering. They are off to odd starts in Dayton and Cincinnati--not the fast growing areas. One wonders where the distribution will be and who it is---S and E of Pittsburgh you have to deal with mountains and towns that have been losing population since the 1950s.

They self distribute.

They have supported stores out in Idaho from a NorCal distribution center for many years. Back in the 00's they supported stores in Salt Lake City, Las Vegas, and Phoenix from a NorCal distribution center too. Those all closed.

In some cases these "distant" locations they place a store in, they actually go deliver to the store there, but then they also pick up other merchandise somewhere in those places to bring back to their distribution center to send off to other stores. So that may be part of what they are doing with these random OH Stores.

OH is interesting as they will start to move into Big Lots home turf where I assume (???) they are stronger (????) and also will have to deal with Marc's. I feel like these types of stores all attract the same customers.

Just like they are opportunistic on finding merchandise they are the same with sites. If they can get a deal on a site they'll jump on it. As long as they think they can get an operator and get enough traffic, they can go into no growth areas and low population/rural areas and work pretty well.

[SamSpade]

I'll probably add this to the national thread as well, but G.O. is pushing that they now offer an "app" and that it can search your store's inventory, so you know if they will or won't have something in stock.

[mbz321]

I'll probably add this to the national thread as well, but G.O. is pushing that they now offer an "app" and that it can search your store's inventory, so you know if they will or won't have something in stock.

Interesting. I know they already partner with Instacart, but I just don't see them getting that much business that way given the overall random selection of merchandise. I feel most of the purchases from GO are pure impulse purchases, unless it happens to be the only grocery store in the immediate area.

[storewanderer]

I'll probably add this to the national thread as well, but G.O. is pushing that they now offer an "app" and that it can search your store's inventory, so you know if they will or won't have something in stock.

Interesting. I know they already partner with Instacart, but I just don't see them getting that much business that way given the overall random selection of merchandise. I feel most of the purchases from GO are pure impulse purchases, unless it happens to be the only grocery store in the immediate area.

I notice the pinpad is wanting a phone number the past few weeks, but I am not clear what the point of signing up with them is. Just like I've never signed up with Save Mart either.

Some stores here had some thing if you write your phone number on the receipt then put your receipt in a box you could win a random drawing for the amount they say you "saved" not sure how often they drew but I was told now that drawing entry will be based on app use at checkout as opposed to dropping your receipt in a drop box at the door.

I don't see how it is worth it for them to somehow track the inventory for apps or Instacart, I feel like that must involve a ton of work. Unless somehow the warehouse handles it based on what they send to the store (since the inventory is all consigned to the store operators). When I shop there I look at dates closely to decide whether or not to buy. When something is going to expire in a month I may not buy it. For stuff with expiration out past a month or two it is okay but again that expiration also impacts the quantity of items I buy.

I could almost see the app product search function discouraging customers. If a customer decides they want Oreos but Grocery Outlet has none, they may see that on the app and just not go there, but if the customers actually goes there and then sees they have multiple other cookie products that the customer may settle on something else... Grocery Outlet sells so many vague random items, I can't even remember the name or brand of half of the items I've bought there... and most of it is not stuff other stores in the area offer.