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Posting by: Debbie Andrews
Date: October 16, 2009
It isn’t every family business owner’s dream to grow their company huge; sometimes the desire is to be successful, manageable by the family, and perhaps to consistently continue on for some generations, producing a great reputation from the family name. But of course many family businesses aim high and get there, like Grocery Outlet, Inc., a third-generation “extreme value” grocery retailer.
Many family-owned supermarket chains stay relatively local, with a dozen or so locations, and many of those fail and get bought up by larger chains. Grocery Outlet is different, having become a franchise and expanding to over 135 stores in six Western states. Yet they still have the reputation for a close family running the overall business, led by Executive Chairman Steven Read and Chairman Peter Read, and like-minded independent, locally-based family operators.
Smart Investing in these Economic Times
With a track record of successful acquisitions and capital investments in the multi-billions, Berkshire Partners LLC seems to know a thing or two about a good bet. There are many reasons why Grocery Outlet looked ripe for a mutually-beneficial investment support, but the strong and consistent business model, and the wise focus on deeply-discounted products during this tight economy seem in alignment with this reasoning.
Not coincidentally, more families are eating together at home, spending time together, and likely increasing the success of Grocery Outlet. There is almost safety in knowing the few essentials and patterns that emerge during economic difficulty. Where just shopping at the store goes from being a chore to almost being a family event that can be fun and bonding at the same time.
A Message to Family Businesses that Want to Grow
Okay, so not every family business is going to convince Berkshire Partners to invest in them. And not every family business is going to change their mission and raison d'être overnight, if at all. But we have to bring home (pardon the pun) once again that a family business is also a business period. Like any other business, it needs planning, for structure, growth, succession, marketing strategies, etc. And smart investors aren’t just the financial giants who may help your family business out on that end of things – these days smart investors are your prospects and clients, and they want to see that you behave as wisely as they would and do.
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