Robber Barron's Profile
Thanks for writing this piece, really enjoyed learning about this incredibly successful low-cost model. They’re obviously doing a lot with product costs and vendor negotiations to drive lower prices, but as we’ve seen in a few cases this Fall, distribution is incredibly important for grocery chains so would be interested to learn about how they have managed to build out their logistics network to reach the ~4,500 current stores. Are they contracting with third party providers or do they maintain in-house?
The difference in SKUs between Bim and traditional convenience or grocery stores is remarkable. Are they carrying well-known brands (just less of them) or just carrying a mix of private label and lesser-known brands? Ultimately, I think brand still matters, so would be interested to see what happens as many of the major CPG brands make a stronger push into these countries.
Pretty amazing what they’ve done, would love to see the payback period on these stores. Think this business is also an example of altruistic capitalism, as positive externalities abound from being able to, as you mention, make high-quality and inexpensive food readily available to a large portion of the population.
Enjoyed reading about this company which has clearly carved out a niche within the discount channel. You mention sourcing as a key value driver in the operating model, so I’m wondering how they are able to source products at 20-25% discounts to Wal-Mart? Presumably it is similar to a dollar store model (i.e. sourcing a lot of close-out merchandise from other retailers), in which case, do you think the ability to do so is sustainable were the company to grow store count by 4x to the 950 opportunities you mention above?
It looks like growth has been driven almost entirely by new store openings, do you get a sense of who Ollie’s is taking share from when they enter a new market? It appears the mix of consumables is far below Wal-Mart or dollar stores so may be some of the players that “Baker’s Dozen” mentions above. Given the product mix, don’t think this business translates to e-comm so will be important to understand who the loyal customer is (age, location, demographics, income, etc.) to frame the Amazon threat.