The hard-discount, limited-assortment grocery format has been expanding rapidly for several years in the United States and making gains in capturing market share with its rock-bottom prices and convenient shopping experience. Save-A-Lot is one of the largest hard-discount retailers in the U.S. and offers a unique business model for independent retailers.
As Mike Stout, director, license business development at Save-A-Lot explained, the hard-discount format relies on efficiencies in logistics and operations to generate margins off of a smaller sales base than traditional supermarkets.
“Stores measure between 12,000 and 18,000 square feet, offering up to about 3,000 SKUs,” Stout said. “Prices are typically 20% to 40% lower on comparable items than traditional supermarkets, and lower even than dollar stores and discount supercenters.”
Using the hard-discount strategy, Save-A-Lot customers enjoy saving up to 40% compared to traditional grocery stores on high-quality, exclusive brands and can find national brand products, as well as USDA-inspected beef, pork and poultry, farm-fresh fruits and vegetables, and non-food items. In addition, Save-A-Lot’s smaller stores are clean, bright and make the customers’ shopping experience quicker and easier.
Joe Janes is one such entrepreneur who recently expanded his family’s Ohio-based grocery business by opening and adding 11 Save-A-Lot stores to the company’s retail portfolio throughout the state. As Janes told Grocery Entrepreneur, “[Save-A-Lot] provides us with industry-leading ideas and services. They help to locate stores in the right area. They do demographic analysis. They help design interior layouts to produce an optimum shopping experience for the customer.”
As one of the leading hard-discount grocery chains in America, Save-A-Lot provides a proven business model, along with comprehensive support services to individual store owners and operators. In fact, Save-A-Lot has a new incentive program designed to help retailers interested in opening new stores.
As such, more and more convenience-store owners and operators thinking about diversifying their business are focusing on the hard-discount model.
“Independent retailers choose Save-A-Lot for many of the same reasons our customers do,” Stout said. “Efficiencies such as our carefully selected assortment business model and exclusive Save-A-Lot brands help keep costs low and offer customers the savings they have come to expect. Save-A-Lot also utilizes smaller format stores that are bright, clean and user-friendly. Their smaller size also equates to lower overhead.”
Bill Lingle and his son, Matt, operate nine Save-A-Lot locations throughout Pennsylvania. As Matt Lingle explained to Grocery Entrepreneur, “Save-A-Lot offers a low cost of goods, delivered to our store. Those things allow us to compete with national players like Wal-Mart and regional players like Weis Markets. We can operate competitively because of the structure.”
With Save-A-Lot’s Licensed Store Incentive Program, all new and converted licensed stores will receive an incentive of at least $200,000. “First time Save-A-Lot licensees also receive support services,” Stout said. “These include such things as basic accounting services and IT-host support at reduced cost or no cost for the first year of store operation and management training for up to four of the retailer's key personnel.”
For more information about Save-A-Lot's opportunities for c-store operators, click here.
This post is sponsored by Save-A-Lot