Grocery Outlet On Track to Open 12 Northwest Stores in '05

SEATTLE-Grocery Outlet Inc. has opened seven stores in Oregon and Washington so far this year and will open at least four more in Washington before the end of the year. The Berkeley, CA-based discount retailer has 122 stores in seven western states. When the four new stores in Washington are up and running later this year, about half of the stores will be located in Oregon and Washington.A company executive tells GlobeSt.com that part of the company's attraction to the Northwest is that its stores here have done well, in part due to low rates for utilities and workman's compensation insurance compared to California, which is home to a big chunk of the company's stores. "Oregon and Washington have an extremely favorable business climate right now," he says.Next month, it will open stores in Bonney Lake, WA and Camas, WA. In October, stores will open in Seattle's Madrona neighborhood and in Marysville, WA. When these stores open, Grocery Outlets will have opened 11 stores this year, all in Oregon and Washington, up from about half that in 2004, and expects to open 12 in 2006. Last week, the company opened a store in a former Albertson's grocery store in Klamath Falls, OR that it is leasing. Last month, the company opened stores in the Oregon cities of Milwaukie and Brookings. In the first half of the year, it opened stores in Florence, OR and the Washington cities of Lynwood, Chehalis and Auburn.The average size of the company's stores is 16,000 sf in terms of the sales floor, and about 70% of its product is food. The stores are run by operators who collect a commission based on sales while the company provides the store site, the product and most of the back-office functions. Operators pay a "very modest fee, nothing like a franchise fee" to be an operator, says the company source.