Grocery Outlet Launches Private Label Assortment
Grocery Outlet’s new private label assortment is now in stores with its SimplyGO brand the first to hit store shelves.
The initial product line includes beverages, dairy, baking, and pasta, with the GO Home & Haven and GO Paw & Pamper private brands being added to stores in the coming weeks. GO Home & Haven will be used for household essentials as well as personal care categories. GO Paw & Pamper will serve as Grocery Outlet’s brand for pet food and accessories.
“We remain on track to introduce approximately 100 new private label SKUs by the end of this year,” said RJ Sheedy, president and CEO of Grocery Outlet. “In addition to better value and inventory consistency for our customers, these initial products will deliver better margins for Grocery Outlet and operators.”
For the better part of the past year, Grocery Outlet has been working on the development of its new private label assortment. During a conference call to discuss the company’s second quarter results, Sheedy said the new store brand products offer better value than corresponding everyday items they are replacing while also offering improved margins for its retail owners.
“The store operators will be featuring (the private label products) from a merchandising standpoint,” he said. “We’ll be supporting that with in-store signage and other messaging in the store to make sure customers are noticing these great new items and values that are available through our private label offering.”
Details of Grocery Outlet’s new private label assortment were shared the same day the company announced strong sales growth for its second quarter ended June 29. Net sales were up 11.7% to $1.13 billion. Comparable store sales increased 2.9% driven by a 5.1% increase in the number of transactions, partially offset by a 2.1% decrease in average transaction size. Net income decreased 42.8% to $14 million, or $0.14 per share.
"We are pleased with our second quarter performance with gross margins and earnings coming in better than our expectations," said Sheedy. "We also continue to make good progress with our systems transition work and are happy to now have the material negative P&L impact behind us."
In addition to the previously announced 40 stores acquired as part of the United Grocery Outlet acquisition on April 1, the Grocery Outlet opened 11 new stores and closed one store, ending the quarter with 524 stores in 16 states.
We opened our first store in Delaware and our second store in Ohio with our entry into the Cincinnati market, and we are now operating in 16 states,” Sheedy said. “New market store economics are healthy, and we are pleased with the portability of our customer value proposition.”
The grocer has also updated its store opening plans and now expects to add between 62 and 64 new stores this year.
