Sponsored By

Grocery Outlet files for IPO

Registration statement outlines ambitious growth strategy

Russell Redman

May 15, 2019

2 Min Read
Supermarket News logo in a gray background | Supermarket News

With an eye toward big expansion, Grocery Outlet Bargain Market is moving ahead with an initial public offering.

The extreme-value grocery chain this week filed a Form S-1 registration statement with the Securities and Exchange Commission for an IPO of common stock. The proposed maximum aggregate offering, in part an estimate for calculating the registration fee, is for $100 million.

At this time, the share price range, number of shares and offering date haven’t been disclosed. The company, which made the filing as Grocery Outlet Holding Corp., would trade on the Nasdaq Global Select Market under the symbol “GO.”

Emeryville, Calif.-based Grocery Outlet currently has 316 stores in California, Idaho, Nevada, Oregon, Pennsylvania and Washington. Sales rose 10.2% to nearly $2.29 billion in 2018, with same-store sales up 3.9% and reported net income per share of 33 cents.

Grocery Outlet opened 26 new stores last year and aims to open 32 during 2019. The chain trumpets big discounts on brand-name products, offering savings of 40% to 70% versus conventional retailers, achieved through a sourcing model of purchasing surplus inventory and product overruns directly from thousands of supplier partners. Stores are run by independent owner-operators from the communities they serve and carry a full range of groceries, including fresh produce, meat and deli; dairy; beer and wine; natural and organic items; health and beauty aids; and seasonal items. The company describes itself as the nation’s largest and fastest-growing extreme-value grocery retailer.

Related:Grocery Outlet CEO deems SoCal 'huge growth market'

“We believe there is an opportunity to establish over 400 additional locations in the states in which we currently operate and approximately 1,600 additional locations when neighboring states are included,” Grocery Outlet said in the May 13 IPO filing. “Our goal is to expand our store base by approximately 10% annually by penetrating existing and contiguous regions. Over the long term, we believe the market potential exists to establish 4,800 locations nationally.”

Beginning this year, Grocery Outlet transitioned its leadership from a dual-CEO structure. The company’s board of directors in late December named Eric Lindberg as CEO and MacGregor Read as vice chairman effective Jan. 1. They had served as co-CEOs since 2006.

In late 2014, Grocery Outlet’s senior management partnered with affiliates of private equity firm Hellman & Friedman LLC to acquire the chain from principal owner Berkshire Partners LLC.

The retailer said in this week’s filing that, since 2015, it has expanded its store count from 237 to 316, a compound annual growth rate (CAGR) of 10.1%; boosted sales by a CAGR of 12%, from $1.6 billion to $2.3 billion; increased same-store sales at an average annual rate of 4.2%; and raised net earnings from $4.8 million to $15.9 million, a 49.3% CAGR.

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

Stay up-to-date on the latest food retail news and trends
Subscribe to free eNewsletters from Supermarket News

You May Also Like