[CASE STUDY]: Grocery Outlet

The following Q&A session was held between Market Dojo and Brian McAndrews, Chief Store Development Officer at Grocery Outlet. 

Brian, please tell us in your own words about Grocery Outlet.

Grocery Outlet is a deep discount grocery shop offering.  The stores are independently owned and operated, supported by the corporate network.  We do opportunistic buying and offer named-brand goods at extremely deep discounts. Grocery Outlet is a value player in the grocery space with pricing advantageous relative to all of our competition.

What is your role at Grocery Outlet and your key objectives?

I’m the Chief Store Development Officer.  That’s just a fancy way of saying everything that has to do with our brick and mortar footprint, including our distribution facilities etc., fall under my umbrella.

Facilities repair and maintenance work, lease administration and contract management work, new store site selection, development, re-modelling, construction and refrigeration all fall underneath my management and the various leaders across my team.

How did you come to learn of Sourcing Dojo?

We engaged with an individual by the name of Jordan Jansen to ramp up our expertise around procurement in parallel with our rapid expansion.

Jordan introduced Grocery Outlet to Sourcing Dojo to execute some initial procurement projects.

What was the landscape of your procurement team when you first embarked on this initiative?

Grocery Outlet historically has not had what would be traditionally considered an internal procurement team.  We have a very robust merchandise buying team that works with the vendors around the offering we provide to our consumers.  

But we did not have a procurement team in place relative to construction materials or other related items, furniture fixtures and equipment for the stores, etc. Those things were being procured individually through the various management groups for each of the disciplines.

What were the pain points you were looking to address?

I perceive optimised procurement to be its own specialty.  It is not a discipline that should be sitting at the side of someone’s desk.  For instance, my Vice President of refrigeration should not be the one driving procurement of quantities of freezer cases.   The VP Refrigeration should be determining engineering and specification requirements and be involved in the final purchase determination however the administration of the RFP/bid-auction process should be managed by procurement experts.

The procurement piece itself is a very focused specialised discipline that requires full attention and data management around putting out an RFP, gathering the bids, negotiating the bids, creating the competition to optimise pricing.

What benefits have you seen so far from using Sourcing Dojo & how did those compare to your expectations?

Relative to the big picture experience I’ve had at other companies prior to coming to Grocery Outlet, where we did have procurement people in-house, the outcome of the procurement process has fallen in line with my expectations.  What has outperformed expectations is the leveraging of Sourcing Dojo in the process.

I have found the platform intuitive, easy to use.  We were up and running very quickly with minimal training.  And the vendors that we were negotiating with and distributing information out to had the same experience. They were able to participate in the activities without a steep learning curve, relative to how to engage with the technology.

Source: Instagram

What kind of categories have you applied Sourcing Dojo to and can you give any summary on the results you’ve seen?

One of the initial tests was on a generator installation package for our stores. We were experiencing limited preventive blackouts from our utility providers in California as they upgraded overall power grid engineering. We went to market, not only on the acquisition of the equipment, but also the engineering designs and the installations themselves. Across the board we found that we were able to obtain very advantageous pricing and a lot more flexibility in which vendors we were leveraging.  The results of that, from a price standpoint, fell in line with expectations, yet the flexibility exceeded expectations. 

Another project we applied it to was benchmarking against our existing installation of LED lighting across our store portfolio, both with new stores and retrofitting existing stores. We have had a history with certain vendors and we knew what our baseline pricing was. By taking it out to market via Sourcing Dojo, inviting a much larger group of vendors and really putting competitive pressure on them, we were able to dramatically lower our pricing, including with the established vendor. 

One of the advantages of using Sourcing Dojo is the transparency, as well as the ready ability to compare vendor offerings clearly.  Quite often the discipline is focused on driving down the pricing with an existing vendor.  This is a very open platform that gathers a lot of information and puts the existing vendor under a great deal more pressure.  We came away from the process feeling we’d left no stone unturned and ended up with a much better outcome than we otherwise would have if we’d simply focused on the existing vendor and maybe a couple of alternatives. We really were able to go out and assess the whole market of appropriate vendors.

How would you rate the service and the solution that Market Dojo provided?

I was not personally down in the weeds and operating the system, I was only seeing the dashboarding of the results. That said, my take-away from the experience is that individuals on my staff, as well as individuals in Finance and other portions of the procurement process, were completely focused on the results.  I was hearing no feedback of any challenges around the IT.

I think the service was great from the start, which just smooths the road all the way through.  If there ever was a problem, and I never did hear about one, I imagine it got cured very quickly. Thus, like I said, I never heard one.

What would you say to anyone else looking at such a tool or process?

Honestly, if it was a competitor to Grocery Outlet, I wouldn’t tell them about you!   But if asked by one of my peers in a different channel of retailing, looking for this type of help, I would certainly point them in the direction of Market Dojo. I have nothing but positive things to say about the experience.

Are there any particular areas where we can improve? 

I don’t have any questions that come to mind, though I’m sure that you would be very responsive.  I look forward to leveraging the platform in the future. And as we learn more about one another’s needs and capabilities, I’m sure that you’ll evolve accordingly.

Are there any final comments you would like to share?

The one thing I would like to share is that you, in particular, and I imagine this is throughout the company culture, really do seem genuinely engaged in making sure that the customer experience is optimised.  You’re sincere in your efforts to be the most effective partner you can be.  I don’t perceive any lipservice: the follow ups have been great and the execution has been great. Like I said, no hesitancy continuing the relationship and growing it.

Source: Instagram

To find out more about Grocery Outlet, please click here.

About Market Dojo

Market Dojo offer an array of capabilities to help procurement professionals get the most out of their sourcing and supplier engagement activities.

Whether you’re looking to run ‘on the spot’ eAuctions, revamp your Supplier Onboarding process, or simply a safe place to store your all important supplier contracts, we have the tools to help.

We believe in making better eSourcing a reality for all procurement teams, regardless of location, experience or budgets. All our products are fully on demand, designed by procurement professionals and built with a focus on ease of use.