How Grocery Outlet's Food Gets Onto Its Shelves - Tasting Table

"Grocery Outlet is an outlet store for food. The chain originated in the 1940s by selling food it bought for a discount from the military, and it has grown that model to buying excess merchandise from other retailers. This is called an "opportunistic" buying model, where the items Grocery Outlet carries are always inconsistent, and are only acquired when they can be bought for pennies on the dollar."

"The company employs buyers who travel the country looking for those opportunities where other chains or suppliers are facing inventory issues. This can be something as simple as companies that overbought a product, and seasonal products that are out of date, but it can also mean leftover products that still have old packaging after a rebranding, or items that are closer to their sell-by dates."

"Other retailers would rather sell to Grocery Outlet, even at a massive discount, than simply let the products go to waste. That opportunistic sourcing is why Grocery Outlet can carry name-brand products and still be so cheap."

Grocery Outlet is a California-based retailer that offers prices 20% cheaper than other budget supermarkets through an opportunistic buying model. Unlike warehouse clubs or stores relying on private labels, Grocery Outlet functions as an outlet for food, similar to clothing retailers like Nordstrom Rack. The company employs buyers who travel nationwide seeking inventory opportunities from other retailers facing overstock situations. These opportunities include overbought products, seasonal items past their peak, rebranded merchandise with old packaging, and products nearing sell-by dates. Other retailers prefer selling excess inventory to Grocery Outlet at massive discounts rather than disposing of products, enabling Grocery Outlet to offer name-brand items at significantly reduced prices despite inconsistent product selection.

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