Ontario grocery chain that went viral for low prices reveals how they keep costs down

Left: thegroceryoutletcanada/Instagram, Right: bailsbarbosa/TikTok

An Ontario grocery chain said they are seeing an “unprecedented” surge in customers after a recent TikTok revealing the company’s low food prices went viral.

The TikTok, posted by user BailsBarbosa, has amassed more than 240,000 views since being uploaded on Jan. 31.

In the video, Barbosa can be heard advising her 55,000 followers to shop at The Grocery Outlet if they want “the cheapest items.”

She then films herself shopping, featuring items such as a party-sized package of Oreos for $2.99 and a 150g package of hot salami for $1.99.

In an interview with CTV News Toronto Wednesday, Carolyn Boiani, co-owner of The Grocery Outlet, said the video has prompted a boost in foot traffic, and that she’s had to up her staffing levels.

“We're running as fast as we can right now,” she said. “We just hope that people have patience with us because we are seeing unprecedented traffic.”

WHY ARE THE PRODUCTS SO CHEAP?

Boiana founded The Grocery Outlet alongside her sister in 1998.

The company purchases products from manufacturers that are, in most cases, produced for a different intended client, Boiana said – those products may fall short of specifications, have been overproduced, or contain imperfections.

“When we started our company, we started off as primarily a bakery outlet,” she said. “But we soon realized that pretty much every major manufacturer has products that, for whatever reason, are off-spec.”

Boiana pointed to the example of a packaged bakery pie – “A lot of times, it's pies that with seepage where the pie filling looks a little messy,’ she explained.

“It'll taste fine but it just doesn't look as pretty as what they want, so when they're selling it at a major grocery chain for $7.99, they want a perfect-looking pie, but we can sell that pie for maybe $3.99 and it's got seepage.”

On average, Boiana said The Grocery Outlet sells products from 30 to 70 per cent off.

“Most of our products we try to sell around 50 per cent off but it depends on the item, so sometimes things are 90 per cent off and sometimes things are 20 per cent off,” she added.

In recent years - even before BailsBarbosa's TikTok drew considerable publicity - Boiana said she's witnessed an uptick in traffic, largely due to increasing food costs in Canada.

"We haven't always seen the crunch that that people are experiencing now," she said. "When expenses rise for people, they start looking for other ways to save money because they are just simply feeling the squeeze."

Coming up on her 25th year in business, Boiani said she’s “incredibly proud” of the company she and her sister built.

“I genuinely believe that a lot of the products, if we weren't selling them, would end up in a landfill and it's a tremendous waste of resources, and money to have so much food being wasted that could be sold,” she said.

“[The Grocery Outlet] allows us to get good quality food into people's hands that would have been wasted, so were incredibly proud of it.”

The Grocery Outlet has 12 locations across southern Ontario.