In a significant shift for the discount grocery retailer, Grocery Outlet Holding Corp. has announced the launch of its private label program, GO Brands. The introduction comes amid growing competition in the grocery landscape, where private label offerings are becoming a key driver of customer loyalty and sales. The rollout will include two brands—SimplyGO and GO Home & Haven—beginning this month, with a third brand, GO Paw & Pamper, set to debut next year. By the end of the year, 100 new private label stock-keeping units (SKUs) will be available across Grocery Outlet’s outlets.
RJ Sheedy, the president and CEO of Grocery Outlet, emphasized the company’s commitment to providing quality products at unbeatable values. In a marketplace where consumers are increasingly looking for value without compromising quality, this initiative appears to be a strategic response to meet those demands. “At Grocery Outlet, we are committed to our mission of Touching Lives for the Better by saving our customers money and providing quality products at unbeatable values,” stated Sheedy. By creating brands with unique identities, Grocery Outlet aims to maintain the high standards of quality that consumers expect.
The product offerings for the two initial brands are well-defined. SimplyGO will feature essential grocery items such as pastas, baking essentials, and dairy products, including staples like butter and cheese. GO Home & Haven, on the other hand, will offer everyday household essentials and personal care items such as paper towels and facial tissues. The upcoming GO Paw & Pamper brand will focus on pet products, including food and accessories, responding to the increasing trend of consumers considering their pets as family members.
The private label initiative illustrates Grocery Outlet’s understanding of current market trends. According to Steve Wilson, the EVP and chief purchasing officer, “Shoppers today have high expectations of any private label brand they purchase,” and many consumers choose their grocery stores based on these exclusive offerings. This understanding positions GO Brands as a complementary addition to Grocery Outlet’s existing range of quality name brands, further enriching the shopping experience.
It’s important to note Grocery Outlet’s positive performance metrics. In its most recent earnings report for the second quarter ending June 29, the company reported better-than-expected gross margins. Although there was a decrease of 140 basis points, the gross margin stood at 30.9%, exceeding expectations by 90 basis points and showing a 160-basis-point improvement from the previous quarter. This financial success may provide the company with additional leverage as it introduces its private label products.
Grocery Outlet operates a network of more than 520 independently operated stores across various states, including California, Washington, and Pennsylvania. With private label brands growing in significance within the grocery sector, this initiative aligns Grocery Outlet with broader industry trends while aiming to capture more market share. As consumers become increasingly discerning, retailers that can offer high-quality and well-priced store brand options may find themselves at a notable advantage.
The retail grocery environment has shifted significantly in recent years. According to a report by the Food Marketing Institute, about 60% of consumers now prefer shopping at retailers that offer a strong private label selection. Moreover, private label buyers tend to show high levels of brand loyalty, often returning to stores where they find products catering to their needs at reasonable prices.
In conclusion, Grocery Outlet’s move to introduce private label products demonstrates an understanding of consumer trends and an eagerness to adapt in a competitive market. With its GO Brands initiative, the company hopes to not only meet customer expectations but also create a shopping experience that keeps consumers returning. As the grocery sector continues to evolve, the success of these brands will likely depend on their ability to deliver quality and value.
