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For this retailer, authentic growth depends on mission, community and model

A buyer for Grocery Outlet shares how its stores carry out the mission of improving healthy food access.

Brandie Miller—natural, organic, specialty and healthy (NOSH) buyer at California-based Grocery Outlet—has led the company toward double-digit sales growth. She is committed to bringing more healthy food options to lower-income neighborhoods. Here, she shares how Grocery Outlet’s model helps to achieve that mission, which will also be the focus of her Expo East talk, "How to Expand Your Business with Authenticity."

Can you give us a preview of what you’ll talk about at Expo?

Brandie Miller: I’ll share our business model and why we feel that our independent operative model—where each of our stores is independently-owned—is important for the growth of our stores. Each store that we open is owned by a couple—a husband and wife team, father-son, mother-daughter, two people that have good experience in the retail industry and want to be entrepreneurial and own their own stores. Some have been store managers with Kroger and some of the other larger chains. They do their own local marketing and find ways to connect with the community through local food banks, church communities, etc. It puts a lot of the incentive on them to keep the stores clean and happy and connected to the community.

When you’re checking out in our stores, people know your name and they’re friendly. You can see the owners walking around the store, opening boxes and wearing an apron. In today’s big box world, that’s really rare. It enables our corporate office to do what we do best, and let these operators run the store the way that is best for their communities.

Can you explain more about each of those roles?

BM: We buy the inventory and price it. We pick the real estate and design of the stores. We build out the lease, we’re in charge of distribution, marketing and branding, and other things like back-office technology and best practices and auditing—and overall, making sure the stores are adhering to our guidelines for quality and cleanliness, those kinds of things. Their responsibilities are things like product ordering, utility costs, store supplies, shrink costs and local marketing.

So you buy inventory in the corporate office and stores then buy from you, but they have autonomy over what to buy? It sounds like you’re basically curating a catalog that individual stores can purchase from. Is that right?

BM: Yes, and the beauty is, I’m not telling them what to order. They get to pick because they know their communities. Some stores may want more ethnic items and things that are more affordable—or small pack sizes because it’s a city store with limited space, or people may not be able to drive there, etc. Whereas a store in downtown Boulder, that operator is going to order bottles of coconut oil and avocado oil and K-cups. The options you’ll find are very different from store to store. So they pick what they want at the store level, we ship them and when it scans at the register, we split the profit 50-50.

How does food access in underserved areas fit into this model?

BM: Each store has to have an organic and natural set. Our check stands are all being redone to have better-for-you bars and other healthier options near checkout. We’ve reduced our snack options and increased our produce section. All those things lead to better buying decisions. We do well in both types of neighborhoods, but we definitely pick need-based area, where low-income families tend to gravitate toward their stores.

We have a lot of stores in Oakland, parts of Sacramento and other areas where there aren’t a lot of food options. Visitacion Valley in San Francisco, for example; there’s not a lot of grocery stores in that neighborhood. And produce is up by a crazy amount in our stores. 

Since last year, 10 stores in some of the lowest-income neighborhoods we operate in, with household incomes averaging $55,000, have seen an average of 35 percent growth in NOSH and have added one percent to their topline sales from growing NOSH this year.

That’s interesting. For many retailers, simply adding more produce and healthier foods to the mix hasn’t meant that customers buy them. Do you have any tips for retailers interested in boosting healthy food access?

BM: You need to be really involved in your community. It doesn’t work as an outsider coming in and opening a store. We find and source operators, and they apply for a store in the community they want to live in or where they’re from. That’s really important because we want them to know the idiosyncrasies of Boulder vs. Denver, or San Francisco vs. Oakland. You’re going to market differently, inventory differently, so don’t be an outsider. Be authentic about who you are, and hit that message really hard.

We’re not good at doing sampling or recipes or anything like that. Our model is too lean. We’re more about connecting with customers interpersonally—our operators know almost everyone who walks in the door. They have their kids working in the store, they go to church on the weekend, they have their favorite food bank that they donate to. I would just emphasize really knowing your community—not just being there, but being it.

Catch Brandie Miller at Expo East.
What: Retail Lunch & Learn
When: 12 - 2 p.m., Wednesday, Sept. 21, 2016
Where: Baltimore Convention Center Room 303


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