Two retailers seem to be doing especially well lately as many shoppers look to save money: Discount grocer Aldi and off-price retailer T.J. Maxx.
One growing supermarket chain, Grocery Outlet, seems to merge the two business models.
Like Aldi’s locations, Grocery Outlet stores tend to be smaller than traditional supermarkets and emphasize low prices. But the California chain doesn’t rely solely on store brands to cut costs: Like T.J. Maxx, it often sells products that its competitors — or the brands that make them — can’t or don’t want to sell themselves.
Those can include products that are being discontinued by their manufacturer or items that were meant for other industries.
In 2020, for instance, Grocery Outlet bought 30,000 cases of one-gallon containers of salsa that were meant for restaurants, former CEO Robert Sheedy said on an earnings call at the time.
“Grocery Outlet buyers are experts at purchasing that product opportunistically,” chief marketing officer Layla Kasha said in a statement to Business Insider.
That means finding products “outside of the normal retail channel as a result of packaging changes, product overruns, and other varied inventory circumstances,” she said. “Our suppliers offer us great prices on that surplus inventory, and we pass those savings along to our customers.”
Those savings typically result in prices 40% to 70% lower than those of traditional retailers, the company said in its latest annual report.
Grocery Outlet ended 2024 with 533 stores in the US, according to the filing. In 2025, it plans to add 42 more stores to that total, Kasha told Business Insider.
Many of Grocery Outlet’s stores are in the Western US — not shocking, given that the company was founded in San Francisco. In the last few years, though, the chain has been adding more stores in Eastern states, such as Delaware, Maryland, and Pennsylvania.
Having reported on grocery stores for eight years, I wanted to experience what it’s like to shop at Grocery Outlet for myself. Here’s what I saw.