Grocery 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.