Shopping Centers Today International

DEC 2015

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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Page 41 of 143

into Los Angeles now. "Los Angeles is a very competitive grocery market, but we have done a lot of homework and a lot of studying over the last couple of years," said Coyle. Grocery Outlet would like to open 14 stores throughout the Los Angeles area beginning next month and then to keep growing fast through next year. "One of the advantages for Grocery Outlet is their flexibility," said Shauna Mattis, senior vice president of retail brokerage at JLL. The company opens shops in both urban and suburban locations, typically at about 18,000 to 20,000 square feet. In the right markets, sites as small as 14,000 square feet or as large as 24,000 square feet are possible too, depending on the economics, she says. JLL is representing Grocery Outlet in its search for real estate in Los Angeles, Ventura and Orange counties. Ideally, Grocery Outlet likes to co-tenant with other value chains, such as Big Lots, Ross Dress for Less and T.J.Maxx. "They offer a unique concept in that they sell name-brand merchandise that consumers already know and love, at a dis- count," says Mattis. "So they like to go into trade areas that appreciate a value concept." For Grocery Outlet, the key to de- livering on that value promise has been working directly with manufacturers to buy product at a discount and then passing the savings on to the customer. "Our buyers are extremely good at what they do, and that is nurturing relationships that we have had for generations now," said Coyle. Grocery Outlet buyers work directly with about 2,500 manufacturers to pur- chase overstock and excess inventory. Another differentiating aspect of the Grocery Out- let model is its focus on partnership with store operators. The company shares in the profitability of each in a man- ner much like a consignment arrangement. Grocery Outlet leases the space, acquires the inventory and does all of the marketing. The individual store operators are responsible for providing labor, store maintenance and managing day- to-day operations. In many cases, the store operators also live in the communities where the stores are located, which is something the company appreciates. "I think that makes a difference," said Mattis. "They have people working in the stores who not only have a vested interest in the store, but in the community itself." Grocery Outlet operates 20 stores in Pennsylvania just now, having acquired a competing value-price grocery chain there several years ago. These rebranded Grocery Outlet stores have been profitable, so the company plans to expand its store base in Penn- sylvania over the next few years. "We also thought it would be good for a source of supply to form rela- tionships with manufacturers back East," Coyle said. Grocery Outlet wants to keep up a steady growth pace of 10 to 15 per- cent annually. "We're not going to go crazy," said Coyle. "It's just good, aggressive growth that we can tackle and manage effectively." S C T For leasing, contact Bill Coyle, vice pres- ident of real estate, at 42 S C T / D e c e m b e r 2 0 1 5 r e T a i l i n g T o d a y

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