What we know so far about Grocery Outlet’s new private label

Grocery Outlet has built its reputation on a treasure hunt-style shopping experience, driven by opportunistic purchases of well-known brands. Now, the retailer aims to enhance its appeal by introducing private label goods.

“This program, which we’ve been developing over the past year, is set to become another key differentiator, providing even more value and excitement for our customers,” said President and CEO R.J. Sheedy during a recent investor call.

This strategic move aligns with a broader trend among retailers like Walmart, Sprouts Farmers Market, and Good Food Holdings, who are also expanding their private label offerings to improve margins and cater to consumer demand for store brands.

Grocery Outlet, which began hinting at its private label expansion last year, shared more details about its plans during an earnings call.

Launching in the Second Half of 2024

The private label program is scheduled to launch in the third quarter of 2024. Initial offerings will include products in the beverage and grocery categories, with plans to expand into dairy, household, and baking products.

Staples and Specialty Items

Sheedy mentioned that the private label will feature “unique items” and natural, organic, specialty, and healthy products under the NOSH (Natural, Organic, Specialty, and Healthy) category. He described the store brand as an “enhancement” to the existing assortment, offering better value to customers, improved margins for the business, and more differentiation.

Integrating with the Treasure Hunt Experience

Grocery Outlet’s dynamic, ever-changing shelves create a treasure hunt atmosphere that shoppers enjoy. While some private label items will be available year-round, seasonal items and frequent rotation of store brand offerings will be introduced to maintain this engaging shopping experience.

“We intend to incorporate a treasure hunt component into our private label assortment, exploring various ways to do that,” Sheedy explained.

Maintaining the Opportunistic Buying Model
Grocery Outlet plans to roll out approximately 100 private label SKUs by the end of the year, which is a small fraction of the more than 5,000 SKUs per store. These will complement the existing mix of staples and “WOW! offerings” that result from opportunistic purchases of excess inventory from CPGs.

Overall, the introduction of private label goods represents a strategic enhancement to Grocery Outlet’s already unique shopping experience, aiming to provide even greater value and excitement for its customers.