Can Grocery Outlet spread the gospel of quality cheap wine?

Grocery OutletGrocery Outlet, the west coast discount supermarket, wants to use cheap wine to help it expand across the country

Grocery Outlet, the west coast discount supermarket, wants to expand across the country. Can it do so in this age of Walmart, Aldi, Trader Joe’s, and all the rest? And if it does, can it spread the gospel of quality cheap wine?

That’s the question I tried to answer in a freelance piece for Meininger’s Wine Business International. Grocery Outlet’s plans are ambitious: Expanding from 332 to some 4,000 stores as it moves east —  and, say company officials, with cheap wine a key to that expansion.

So why should we be so excited about wine at Grocery Outlet?

For one thing, there are 50 wines in each store that cost $5 or less. For another, those 50 wines are usually not bottom-feeders like Winking Owl. Rather, it’s branded wine from producers we’ve heard of, but that the company buys as seconds, remainders, and discounted items from wholesalers and wineries. And Grocery Outlet is famous among California wine geeks for discounting expensive wine, which it sells for as much as 50 percent off.

This isn’t a new business model for retailing, but it’s very unusual for wine. For one thing, three-tier makes it more difficult than selling overstocks of canned soup. For another, it means each store’s selection changes depending on what the chain can find to discount, so the great $5 wine that was there the last time may not be there the next time. Third, it doesn’t usually stock national brands like Barefoot or Kendall-Jackson, which isn’t the conventional wisdom.

“What we’re doing, and we’re doing it every day, is to find wine through the normal channels, but that it’s wine that we can sell at the right price,” says Cameron Wilson, Grocery Outlet’s director of wine, beer, and spirits. “But what we’re also doing is upgrading the technical quality of the wine we carry, so that everything we carry is in good shape and that it shows well.”

Which sounds like a fine reason for us to care about Grocery Outlet’s success.

6 thoughts on “Can Grocery Outlet spread the gospel of quality cheap wine?

  • By Mike dietrich - Reply

    I have one within 5 minutes of my house. I just retired a year ago from retail wine business after more than 35 years here in Oregon. For me most of the wine at GO is OK at best. Usually wines that are vinted and bottled by someone and not brands I have ever heard of. My rule for these is buy 1 bottle and see how it is. I rarely hit one that I pour down the drain. But then they have things I recognize brand wise. For instance Santa Rita 120 for 3,99. I was also able to get Kim Crawford Rise and Shine Pinot Noir 2014 for 8.99 or Wild Horse Unbridled PN 2013 for 4.99. It is always fun to see what shows up. One of my best was Hawks Crest Lake County Cab 2009 for 4.99. I wondered how it was holding up after 10 years and it was wonderful. I am headed to GO this morning to see what is new. You just have to dig a little bit.

  • By Artem - Reply

    Yes! We have discovered Grocery Outlet when we moved to downtown LA three months ago and it has been a godsend. Lots of quality bottles under $10 and the seleciton is way more diverse than TJ’s.

    The unevennes is the only problem but it’s easy to understand given the naturally limited supply of discounted wine. (Again, think TJ’s hustle buy that don’t last long too.) Just make a habit of immediately stocking up on whatever you’ve found and liked.

  • By Burnsey - Reply

    There is a local discount grocery store that is walking distance to my home.
    They have wine. I think quite a bit of it is remainders and close-outs from local reps. Some of the stuff I find in there is walk away quickly sort of thing, low end white wines from 2012.
    But some it it is absolutely bargain. I’m glad I know my way around.
    Recent finds, KJ Avant, 2017 for $6.99 Wrongo Dongo $7.49 2015 Sanford Pinot Noir $15.99

    It’s hit of miss, but I always give it a look because I never know what I’ll find.

  • By Bill Tobey - Reply

    The Grocery Outlet in Roseville, CA has developed an approach that makes the 4th highest selling wine department in the company.
    First, they have dedicated trained staff working in the wine department particularly on Friday & Saturday. The staff has tasted all the wines particularly the newest arrivals. Then they market to the business people in the area- investment firms, high tech, realtors, etc. They have a special email list for those interested in wines.
    Now, here is the fun part- On Friday and Saturday evenings professionals arrive in the high-end cars, grab an empty cart & go to the wine department. The staff that works in the wine department know what their clients like and load 4-6 bottles into a cart (total cost is lest that one cheap Napa wine!) Then the professionals go out to their cars, turn on the dome light & open all the bottles. Then they go back into the store & buy cases (yes, I said cases!)of the ones they like! After all, wine moves through a Grocery Outlet so quickly a particular wine will typically be gone in two weeks!

    I recently bought a stunning Amador County Zinfandel for $4.99! No, I’m not going to tell you what brand it was as I’m going to buy it all!

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  • By Dyann Espinosa - Reply

    “Gross-Out”, as we refer to the chain in our retail vernacular, is all about the wine. I’ve lived in 4-5 different areas where there was a store. Each one had the formula layout, but the wine sections were treated somewhat differently. And the amount of interaction with knowledgeable staff differed as well. Each store is owned as a franchise.
    It is a little bit of a treasure hunt, but if you know your wines, you can make some killer buys. There is a fair amount of dreck to wade through, but even with the run-of-the-mill offerings you can find “drinkable” wines.
    The cardinal rule is: if you like it, buy it…ALL. Or you will come back the next day and there won’t be a trace of it! I’ve kicked myself several times for assuming that if there are cases of a wine I like stacked up all over, there will certainly be some left tomorrow. No. Nope. Nada.
    So have fun hunting.
    Cheers

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