CINCINNATI — Two months after Publix confirmed it will open a new store in Northern Kentucky, a discount grocery chain from California has secured zoning approvals and sought a building permit for a new store in Colerain Township.
Grocery Outlet Holding Corp. did not respond to WCPO’s questions about its Cincinnati plans.
But in November, the fast-growing company announced the opening of its first Ohio store near Youngstown. It also told investors that it wants to become a national chain with 4,800 stores.
Grocery Outlet now has 455 stores, more than half of which are in California. It notched a $65 million profit on net sales of $3 billion in the first nine months of 2023, according to its most recent quarterly report to shareholders.
“Not a lot of grocery store concepts right now are really looking to expand,” said R.J. Hottovy, head of analytics for Placer.ai, which uses location data to spot retail trends. “They’re one of the few that have really seen expansion into new markets.”
Placer.ai identified Grocery Outlet as one of its “Top 10 Brands to Watch” in 2023, based on its double-digit growth in foot traffic in small-format stores that claim to sell name-brand products at up to 70% below list prices.
“It a little bit reminds me of what you see with TJ Maxx, Marshall’s or Ross Stores,” Hottovy said. “They’re buying excess inventory of name brands and then passing that savings on to consumers. Kind of that treasure hunt feel. I feel like I’m getting a steal.”
Kroger has demonstrated an ability to withstand all challengers in its hometown, as evidenced by its 47% market share in 2023, according to Metro Market Studies. Supercenters Walmart and Meijer have fared the best against Kroger, mustering a 29% share between them. Wholesale Clubs Costco and Sams combined for 12%, while the Aldi’s discount chain stands at 2% with 10 local stores.
Grocery Outlet could bring a new wrinkle to the local grocery industry. It relies on independent store operators to take advantage of the company’s “opportunistic purchases” of excess inventory, according to its November presentation to investors. The document touts its ability to “out chain the locals, and out local the chains.”
But its entry into the Cincinnati fray is far from certain. The Colerain Township Zoning Commission approved a change of use last May for the company to convert the former HH Gregg store at Northgate Mall to its first local grocery store. The certificate expires on May 16 unless the company starts construction or receives an extension.
Grocery Outlet applied for a Hamilton County building permit in November to install signage on the store, but that permit was denied with a request for additional documentation. Hamilton County records show no response from the company since then.
“It wouldn’t surprise me to see interest in the Cincinnati market,” said Hottovy. “They are trying to move into the Midwest. Their concept works in more geographies than just the west coast.”
