Bargain Grocery Outlet (BGO), the Stevenage-based surplus-first supermarket, is preparing for national expansion through a network of independently owned stores after strong customer demand and around 100 Independent Operator enquiries within weeks.
BGO's co-founder id Dee Thaya, who owned Abra wholesale until its acquisition by Leo Worldwide Supply's – now Enzo Wholesale – in June 2024.
He claims BGO's model fits extremely well with the cost-of-living pressures facing many households today, as consumers look for ways to make their grocery budgets go further without compromising on quality.
Rather than relying mainly on fixed product ranges like a conventional supermarket, he says BGO continually searches for exceptional buying opportunities from manufacturers, wholesalers, importers and distributors.
Products can become available because of overproduction, excess stock, cancelled orders, packaging changes, discontinued lines, seasonal overstocks and clearance, products approaching or passing their Best Before dates and other commercial circumstances.
BGO will then purchase these products at significantly reduced costs and pass much of that saving on to customers.
“We see BGO as a genuine win-win-win model,” said Thaya.
“Customers can save money at a time when household budgets are under pressure. Manufacturers, wholesalers and distributors gain a credible and responsible route to market for surplus stock and can recover value from products that might otherwise unnecessarily become waste.
“Our Independent Operators can build profitable businesses for themselves while making a positive contribution to their local communities. At the same time, increasingly environmentally conscious customers can save money while helping to reduce waste.
“Customers save. Suppliers recover value. Independent Operators build businesses. Communities benefit. And together we help reduce waste and protect the environment we all live in.”
BGO's range includes grocery, confectionery, snacks, soft drinks, alcohol, chilled and frozen foods, pet products, household, personal care, ethnic foods, NOSH – Natural, Organic, Speciality & Healthy - and selected non-food products.
Stores are open to everyone with no membership required.
BGO also secures premium frozen products at discounted prices, including some originally manufactured for five-star hotels, premium pubs and restaurants before becoming available through surplus or changing commercial circumstances.
“We have built a supermarket around surplus”
“Traditional clearance warehouses sell surplus,” he continued. “We have built a supermarket around surplus, and our ambition is to build around the country through our network of operators.
“We are surplus-first rather than surplus-only, so alongside the exceptional bargains customers discover, we also want them to be able to buy the everyday products they need.
“Customers can buy one item, several items or, where appropriate, a whole case within a proper retail environment. That combination is what makes BGO different. We believe there is currently nothing quite like it at national scale in the UK retail market.”
A growing opportunity for surplus suppliers
BGO believes one of the biggest benefits of creating a national network will be the ability to absorb substantially larger quantities of surplus inventory.
“One of the challenges in surplus buying is that suppliers often want one buyer capable of taking a substantial quantity,” said Thaya.
“A buying opportunity that may be too large for one BGO store could, as our network develops, potentially be distributed across many locations. That creates a much stronger proposition for manufacturers, wholesalers and distributors.”
As the network develops, BGO plans to establish its own central warehousing and distribution capability, enabling larger buying opportunities to be purchased centrally and allocated across Independent Operator stores.
Customers changing the way they shop
BGO's expansion plans have been partly driven by existing customers, including those visiting from beyond Stevenage and asking when stores will open closer to where they live.
“Quite a few tell us that once they start shopping at BGO and see the huge difference in prices, they find it difficult to go back to paying full price elsewhere,” said Thaya.
“That's why we say Shop BGO First. See what bargains we've rescued, save on what you can with us, and top up the rest as needed. Our stock is constantly changing, so there's always something new to discover – and when it's gone, it's gone.”
Around 100 Independent Operator enquiries within weeks
When BGO briefly advertised its Independent Operator opportunity, it received around 100 enquiries within just a few weeks.
Interest has stretched from Brighton to Glasgow and from Norwich to Nantwich, with enquiries coming from many other parts of the UK.
The enquiries have come from a wide range of professional and commercial backgrounds, including an IT director, a corporate finance manager at a blue-chip company, a senior operations manager, existing retailers and experienced entrepreneurs.
BGO says many of the prospective Independent Operators it has spoken with have been particularly excited by the concept and by the benefits it can create for customers, suppliers, Operators, local communities and the environment. Several prospective Operators have expressed interest in operating multiple BGO outlets, rather than simply opening one location. Some have progressed further, signing letters of intent and asking BGO to secure particular territories for them as discussions progress.
“What has particularly encouraged us is not just the number of enquiries, but the geographic spread, calibre and enthusiasm of the people coming forward,” said Thaya.
“Once people understand the whole model, they see that it isn't simply about opening another shop. They can build a profitable business while helping customers save money, giving suppliers a route for surplus and contributing positively to their communities.
A fragmented UK market
BGO believes the UK surplus-retail sector remains relatively fragmented and regional, with many existing operators trading primarily through warehouse or clearance-style formats.
Internationally, surplus and opportunistic grocery retail has developed considerably further. Grocery Outlet in the USA operates an opportunistic grocery model supported by Independent Operators. Its 2024 Impact Report recorded more than 40,000 Independent Operator enquiries, 49 new Independent Operators joining during the year and 481 Independent Operators by year end. BGO has also studied established surplus and opportunistic retail businesses in Norway, France, Australia, New Zealand and Canada.
“The demand is already proven. What remains fragmented in the UK is how that opportunity is presented to customers,” Thaya said.
“We believe there is room for a recognisable national surplus-first supermarket network operating alongside B&M, Home Bargains, Farmfoods, Aldi, Lidl and the major supermarkets.”
Independent Operators wanted nationwide
BGO is now seeking suitable Independent Operators for London, the Home Counties and locations throughout the UK.
“The Independent Operator brings local entrepreneurship, leadership and day-to-day ownership,” concluded Thaya.
“BGO brings the brand, buying expertise, supplier relationships, systems, training, merchandising, marketing and ongoing support. Our long-term ambition is simple: make surplus-first shopping accessible to communities throughout the UK.”