Ontario grocery store chain sells food for much less — here's how

With 13 locations across Ontario (and more to come), The Grocery Outlet has grown to be a staple for savvy shoppers since its founding in 1998.

The chain is known for offering significant savings — usually between 30 to 70 per cent off traditional retail prices — on groceries, frozen items and refrigerated goods, and here’s how it all works.

Co-founder Carolyn Boiani, along with her sister Pam, built the company from the ground up 27 years ago, inspired by their entrepreneurial household and keen interest in thrift bakery stores.

Their journey first began when they came across Sara Lee’s manufacturing plant in Bramalea, which had a small thrift store selling overstock and liquidation items. They approached the company to buy their seconds and eventually opened their first retail shop at 191 Bloor St. E. in Oshawa.

“When we had one location and no real experience, it was much harder to get manufacturers to even speak to us on the phone or at trade shows, let alone be willing to work with us,” Carolyn told blogTO.

“It took a lot of time and perseverance to learn how we could best partner with our suppliers to create a relationship that worked well for both parties, and that gave consumers real savings on buying everyday food items.”

Since opening their first store, the business has grown to include a dozen more locations across the province, as well as a distribution centre in Whitby. Roughly 80 per cent of their stock is made up of opportunity buys, and includes manufacturers’ over-run products, close-out products and over-productions.

“We buy large volumes and we keep our prices as low as possible to keep the stock turning over consistently. Many of our products are short-dated, and we endeavour to educate consumers what ‘best before’ dates really mean when it comes to food safety so they can buy with confidence,” Carolyn explained.

By purchasing these items at a steep discount — whether it’s due to short-dated products, packaging imperfections, or overstock — the grocery outlet is able to pass these savings onto the customer.

Over the past few decades, the business has built trust with suppliers, which helps to secure a steady stream of discounted items. The sisters spent years making cold calls and visiting trade shows to try to make these connections.

“We have been incredibly fortunate that over the years, we have built relationships with the majority of the largest food manufacturers and distributors in Canada,” Carolyn said.

“Our goal is to partner with them in a way that will provide value to them as a company by helping to prevent food waste and providing them with some return on their investment, while also providing consumers with great deals on products that they might be struggling to afford.”

“We have built [in some cases] decades-long relationships with our suppliers, and they have learned that we are a partner they can trust to handle distressed products responsibly. We follow whatever their guidelines are as far as restricting advertisements, covering private labels and restricting wholesale on their items so that they are only going to the end user,” she added.

“Every manufacturer or vendor ends up with product that they cannot sell to their intended customer, which is usually a grocery or restaurant chain. The reasons vary, but sometimes the date code is too short, the products are imperfectly shaped or sized, they have a delisted item, or they have over-forecasted sales. There are many reasons a vendor has product that they need to sell off at a discount.”

While some customers might feel hesitant about purchasing short-dated items, Carolyn says that the quality of the products the business offers remains high.

“The reality is that our products are by and large the identical products you find at any grocery store, with the same quality standards in place. They may just have a shorter shelf life or some cosmetic imperfections from what you will typically find at a regular retailer, but the quality and taste is the same,” she explained.

“Best before dates are a manufacturer’s guideline for optimal freshness, nothing more. Manufacturers always have established guidelines for how long past the best before dates products will maintain their quality and it is days, weeks or even months beyond the code dating. The manufacturers have their branding on these items and would never jeopardize their hard-fought reputations by selling less than excellent quality products, so consumers can buy with absolute confidence.”

Aside from its savings, one of the factors that makes the outlet stand out is its commitment to sustainability.

“We very much consider ourselves a green company, and have been focused on reducing food waste since our inception. We are pleased that in recent years, there has been so much more conversation around how we can all reduce food waste both as vendors and consumers,” Carolyn said.

“In manufacturing, there are always going to be situations that arise where products simply did not sell as well as anticipated, and the manufacturer ends up with perfectly good product with no place to go to sell it. We step into that void and provide an opportunity for vendors to take product that would be a total loss, and put them into consumers’ hands instead.”

As the company continues to grow, Carolyn says they’re planning to open two new locations in 2025 and double the warehouse’s capabilities to keep up with demand.

“We hope that one day our children may want to carry on with what we have started, but time will tell. As we can see, lower cost food options will continue to be a need for Canadians for the foreseeable future, so we hope that The Grocery Outlet will continue to be around for years to come, far beyond us,” she told blogTO.

“We want to thank our loyal customers, many of whom have been shopping with us for years and years, and we would love to thank our staff who are the most incredible hardworking team we could have ever wished for.”

Above all else, Carolyn says the company encourages shoppers to approach grocery shopping with an open perspective.

“We encourage consumers to think outside the box when it comes to lowering food costs and understand that best before dates are simply a guideline for optimal freshness. And we encourage everyone to continue to support Canadian companies, Canadian producers and Canadian retailers.”

The Grocery Outlet boasts several locations across Ontario, including stores in Newmarket, Whitby, Peterborough, Oshawa, Cobourg, Ajax and Toronto.