Introducing an Emerging Closeout Buyer
At Spoiler Alert, we’re committed to helping CPG companies intelligently (and effectively) manage the mess of excess. So we’re bringing Liquidation Leaders to you. And this time, we’re introducing an emerging player in closeouts – Save A Lot. With a renewed strategic focus, staff expertise, and the logistical flexibility to purchase directly from CPG manufacturers, Save A Lot is using opportunistic purchasing to provide a fiscally responsible, purpose-driven solution for excess, short-dated, and repackaged inventory.
It’s all a part of their “Extreme Value with Purpose” model that plays an important role in the lives of their customers, and we recently sat down with Save A Lot’s SVP of Sales and Business Development, Mark Kotcher, to learn more. According to Mark, he believes Save a Lot is the “best retailer in the country poised to offer extreme value through closeouts.” Want to know why? Watch the full conversation, or read the recap below!
<script src="https://fast.wistia.com/player.js" async></script><script src="https://fast.wistia.com/embed/01wbsxewyl.js" async type="module"></script><style>wistia-player[media-id='01wbsxewyl']:not(:defined) { background: center / contain no-repeat url('https://fast.wistia.com/embed/medias/01wbsxewyl/swatch'); display: block; filter: blur(5px); padding-top:56.25%; }</style> <wistia-player media-id="01wbsxewyl" aspect="1.7777777777777777"></wistia-player>A Value-Oriented Grocery Store
With stores in 30 states, mainly located in the Eastern U.S. from Michigan to Florida and Louisiana to Maine, Save A Lot owns smaller stores that offer its customers an easy shopping experience, with a focus on neighborhoods that really need them.
“We go into food deserts, and that could be extremely rural, and that could be inner city,” says Mark. “We go into areas that may not have had a grocery store in, no kidding, 40 or 50 years.”
According to Mark, as a full-line grocer, they “serve these communities like no other.”
“We cut meat. We have fresh produce. We have a full line of groceries, dairy, and frozen. Everything you need, and nothing you don’t.”
And while their inner-city shoppers may be different from their more rural customers, Mark says they have more in common than most people may realize.
According to Mark, “If you look at the top 1,000 SKUs, everybody's looking to save money and everybody is eating a lot of the same stuff. They have to save money. It's not that they want to; they absolutely have to. And it's almost like a second job to whoever the primary shopper is. On average, they visit four stores a week to be able to help their family.”
Mark also notes they have a strong presence in the Hispanic community, even in areas where that population is not as obvious.
“When it comes to competition, a lot of our competitors do not go into these areas, or they are pulling out of them,” says Mark. So while big box stores in particular remain a force to be reckoned with, Mark believes their model “works perfectly” for their customer base.
A Unique Model for Opportunistic Buying
As both a wholesaler and a store owner, Save A Lot has the unique opportunity to test out products before bringing them to their wider retailers.
“Our number one priority is to make stores successful,” says Mark, who explained they do whatever they need to satisfy the needs of their independent owners, which ultimately satisfies their end customers.
When it comes to closeout buying, Mark recognizes that some suppliers may remember their checkered history. “We’ve been in it, we’ve been out, we’ve been in it, we’ve been out,” says Mark regarding closeouts. But now, with changes in leadership as well as a new team and set of tools, Mark says the “first thing on his mind” is closeouts.
For Save A Lot, opportunistic purchasing not only allows their customers to save money but also provides their store owners with higher margins.
“I would give this a bold prediction that we are the best retailer in the country poised to do exactly what we're about to do. And that is to offer extreme value through closeouts. We are open to buy,” says Mark.
With a new CEO in place, Mark says “the past is the past,” and this shift in strategy is all about growth.
When it comes to close-dated products, Mark says Save A Lot leans on its own stores for those products. But they also have several large owners, as well as groups of owners, who can move fast on closeouts.
While their primary focus is on grocery, dairy, and frozen items, Mark also notes they are “very big on nonfoods” as well.
“I don’t know a single retailer who’s not interested in closeouts,” says Mark.
“In God We Trust, All Others Bring Data”
When making closeout purchasing decisions, Mark says Save A Lot relies heavily on data that allows them to make choices quickly. Using tools like AI, Save A Lot can ensure they hit the right price points, intersecting with units, sales, and margin “that’s great for everybody,” says Mark.
At the same time, “I think of it as 80% science, 20% art,” says Mark, who leans on his years of experience in the industry to get into the heads of his shoppers and offer them products they will enjoy.
But one data point Mark has been happy to discover is how closeouts have lifted categories in their stores.
“As much as people may think that it's cannibalizing, what I saw is that it's absolutely accretive to everything that we're doing,” says Mark, after studying large closeout buys Save A Lot has made in the past.
“When it comes to opportunities for closeouts, there’s no runway,” says Mark. “From what I have seen so far, we have been very, very happy with how each of these categories lift… This is a big incremental opportunity for us, and we're gonna drive it as hard as we possibly can.”
Tools to Move Quickly
Mark knows that to succeed with closeouts, you have to move quickly.
“We lost four truckloads on a deal, because I think we waited five minutes,” he says.
To help Save A Lot move fast, Mark has built a closeout team that works directly with their retailers to identify their needs and help mentor them through the closeout process. They are also developing an online marketplace tool, making it easy for retailers to see what’s available and commit to inventory.
“It’s been met with rave reviews,” says Mark, who noted that the tool alone has doubled their order rates of some retailers.
“Our biggest issue is we need more stuff to sell,” says Mark.
The Future of Closeouts at Save A Lot
Mark hopes that in the next few years, Save A Lot will be more efficient with digital integration, and that will lead to dedicated space in each store for closeouts. He noted the return of “Flash Finds” as a pilot program for closeout products, which is seeing success with retailers.
Mark also noted a push towards e-commerce, and that Save A Lot wants to control their own destiny online.
“Five years from now, I want this to become a double-digit percent part of our total business, which would be a very, very large number,” says Mark. “And we're getting after it.”
If you’d like to connect with this emerging buyer in the closeout space, don’t wait a minute longer! Connect with our team, and we’ll make the introduction ASAP.
