Grocery Outlets: The Secret to Saving Green on Groceries

Financial IQ

When it comes to discount grocery stores, you’re probably already familiar with Trader Joe’s and ALDI, among others, but you may not know about a type of food discounter called a grocery retail remarketer, a grocery outlet, or “salvage” grocery.

On the US west coast, the best-known remarketer is probably the Grocery Outlet Bargain Market chain but elsewhere, there are over a hundred similar companies, like Sharp Shopper in Pennsylvania, B&E Salvage Company in Kentucky, and Mike’s Discount Foods in Minnesota.

Forget clipping coupons to score a deal at your regular grocery store. These outlets sell groceries at extreme discounts all the time compared to more recognized grocery stores because they operate on an entirely different business model and they come with a catch: they won’t always have your favorite name-brand goods in stock all the time.

To understand how these outlets operate, let’s first look at how the grocery industry normally works.

How grocery items make their way to discounters.

Most grocery store chains move their food purchases from suppliers to their own distribution centers and then to their retail stores. Throughout this process, there are many different points where companies make purchasing and inventory control decisions in order to ensure they are minimizing their inventory and shipping costs, stocking only the most popular brands, and selling through their inventory ahead of “best use by” dates.

Given all the guesswork involved in the process, it’s no surprise that these major grocery stores occasionally realize they bought more units of a certain product than they probably should have—whether it was too many boxes of Kellogg’s Corn Flakes or Nutella.

Other times, items become overstock because they go out-of-season, they get damaged at the warehouse, or the supplier re-designs the packaging and re-brands the goods.

However it happens, these extras become a wasted cost for the retailer and this cost must be offset by higher prices on the products we shoppers actually buy.

This is a problem for the grocery store and the consumer, right?

Right, and this is where grocery remarketers come in. These outlets offer to buy the excess or sometimes lightly damaged inventory from the big grocery stores and suppliers at rock-bottom prices.

The sellers love the deal because the remarketers enable them to get rid of excess inventory, thereby reducing their losses. The remarketers love the deal because they can then sell the cheaply bought excess inventory to shoppers like us for extremely low prices and still make a profit!

That’s a win-win-win.

Doesn’t “unused inventory” mean expired or cast-off?

“Cast-off” is the wrong idea. The products just weren’t selling, so the remarketer moved them elsewhere to find a customer. These products are typically the very same name-brand goods you would buy anywhere else and they’re just as safe as they would be elsewhere. As proof, many outlets offer a money-backed quality and satisfaction guarantee.

As part of that guarantee, the outlets also take great care to explain that their goods are not expired. Before you visit an outlet for the first time, I’d recommend visiting its website to learn more about product packaging and “best use” dates.

Basically, a “sell by” date should be followed for safety reasons, but labels like “best if used by” and “use by” dates on packaging are not related to product safety and are just a manufacturer’s recommendation for peak flavor quality.

Outlets may still sell goods after these ‘best use” dates as long as they judge the goods to still be safe.

Buyer beware, of course, but I shop at grocery outlets all the time and I’ve never been disappointed by the quality I’ve found. (Don’t forget the outlet guarantee, either.)

What other things you should know about grocery outlets? Many of them still accept manufacturer’s coupons, which will save you even more money at the checkout. Also, heads-up: many outlets try to keep their costs low by avoiding credit card fees and thus, many outlets don’t accept credit cards.

As the saying goes, cash is king, and now you know how you can save a lot of it just by shifting your shopping to grocery outlets.

Sydney Jarod is a freelance journalist in northern California. His local Grocery Market Bargain Outlet has cured him of his Whole Foods habit.


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