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Grocery Outlet buys suppliers’ excess inventory and other discounted merchandise, then sells it to U.S. shoppers alongside regularly sourced staples such as milk and eggs. These opportunistic purchases make up a substantial part of its buying, so the selection of name-brand foods and household products changes frequently. Stores also carry fresh foods and private-label products.
Most stores are run by independent operators who choose much of the assortment, buy merchandise only from Grocery Outlet, and handle staffing and daily operations. Grocery Outlet owns the goods until shoppers buy them and receives the sales proceeds. It pays operators a commission tied to store gross profit—the sales left after merchandise costs—and generally shares losses from spoilage, theft and markdowns with them.
The business depends on finding enough appealing discounted goods and on operators choosing products that bring local shoppers back. Suppliers generally make no long-term commitments to provide that merchandise, so Grocery Outlet cannot count on repeatedly stocking the same bargains. Stores accepting SNAP food-assistance benefits must maintain registration; each independent operator holds its own registration and is responsible for employee compliance.
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Grocery Outlet’s results also depend on access to discounted excess inventory and competition from low-price grocers outside this list, including Aldi and WinCo.
Walmart’s everyday low prices compete directly with Grocery Outlet’s changing bargains for shoppers’ food and household purchases; Grocery Outlet customers frequently shop at both. Watch Walmart’s pricing on everyday consumables to gauge the competition facing Grocery Outlet’s discounts.
Albertsons competes for Grocery Outlet customers’ consumables spending through its Safeway grocery stores, one of the retailers those customers most often say they also use.
Kroger’s supermarkets compete with Grocery Outlet for household grocery budgets through overlapping food assortments. Kroger’s loyalty-card offers are worth watching for how it uses shoppers’ purchase data to deliver personalized value.
Costco’s membership warehouses compete with Grocery Outlet for shoppers seeking low-priced groceries, and Grocery Outlet explicitly names it as a discount rival. Costco’s limited selection and bulk buying let it sell profitably at low margins—a different way to deliver value from Grocery Outlet’s rotating bargains.
Dollar General competes with Grocery Outlet for budget-conscious shoppers’ spending on everyday consumables and household necessities. Its nearby small stores and discounted private brands offer a convenient alternative to Grocery Outlet’s changing name-brand bargains.
Sprouts Farmers Market competes with Grocery Outlet for fresh, natural and organic food purchases, emphasizing health-oriented selection rather than closeout bargains. Its sales of perishables such as produce, meat and dairy are the clearest area to watch for this overlap.
Weis Markets competes with Grocery Outlet for households’ food purchases in Pennsylvania and surrounding markets. Weis’s emphasis on value, quality and service provides a local comparison for Grocery Outlet’s discounted food offering.
Ingles Markets’ supermarkets compete with Grocery Outlet for grocery shoppers in overlapping southeastern markets, including North Carolina, Georgia and Tennessee. Watch its pricing and food selection in those markets rather than treating all of its sales as a comparison.
Village Super Market’s ShopRite and Fairway supermarkets compete with Grocery Outlet for grocery spending in New Jersey, Maryland and Pennsylvania. Village buys and distributes goods through the retailer-owned cooperative Wakefern, giving its stores purchasing and promotional advantages associated with larger chains.
Sprouts Farmers Market, Inc. earningsSFM
Sprouts Farmers Market’s report will show how its perishables are selling, a category where it competes with Grocery Outlet for shoppers.
Look at Sprouts’ sales of perishables. Strong sales would show that shoppers are still spending on these foods, while also pointing to a strong rival for Grocery Outlet’s overlapping purchases. Weaker sales would suggest less momentum at Sprouts, but would not establish how Grocery Outlet’s own fresh-food sales are doing.
Grocery Outlet Holding Corp. earningsThis company
Grocery Outlet’s report will show whether more store visits are turning into larger baskets while the company holds its gross margin.
Read comparable-store transactions alongside average transaction size and gross margin. More transactions with steady or higher spending per visit and a stable margin would show that rotating bargains and everyday staples are bringing in shoppers without eroding the sales or gross profit they leave behind. If transactions rise but spending per visit or margin falls, more shoppers are coming in but buying less, or Grocery Outlet is giving up more margin to keep prices low; the extra traffic is not improving the business to the same degree.
Walmart Inc. earningsWMT
Walmart’s report will show how its everyday grocery prices and food sales shape the value competition Grocery Outlet faces.
Read Walmart’s everyday grocery prices alongside its food sales. Low prices with resilient sales would show that Walmart’s value offer is drawing shoppers, intensifying price competition for Grocery Outlet’s staples and rotating bargains. Higher prices or weaker food sales could mean less pull from Walmart’s offer, but neither outcome alone proves how Grocery Outlet’s sales changed.
