Grocery Outlet Holding Corp (NASDAQ:GO) Q2 2020 Earnings Conference Call - Final Transcript

Aug 10, 2020 • 04:30 pm ET

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Grocery Outlet Holding Corp (NASDAQ:GO) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator instructions] Our first question comes from the line of Paul Trussell with Deutsche Bank. Please proceed with your question.

Analyst
Paul Trussell

Yes, good afternoon and congrats on another good quarter. To start, maybe we could touch on the availability of goods as well as the performance, kind of breaking down between everyday items as well as opportunistic items.

Executive
RJ Sheedy

Hi, Paull. It's RJ. I can take that one -- or those two questions. I'll start with availability of opportunistic supply. We continue to see ample supply from our partners, as mentioned in our comments. We're pleased with the health of the inventory and the overall assortment. And I'd point to the great work done by our buying and inventory management teams in maintaining inventory levels that we have. We're in a unique situation, for sure, but we've been at this business for a long time, and we've been through lots of different cycles. I'd say we're -- we keep in very close contact with all of our suppliers. We understand supplier dynamics very well, whether it's changes to assortments being made or innovation or where product may still be on allocation.

I'd point to our success right now as being a result of the same methods and approach that really we've followed over many, many years. We haven't changed the way that we conduct business even in this unique situation. We continue to benefit from doing business with lots of different suppliers. We've pointed to the diversified supplier base as a strength on previous calls. Supply does cycle by item and supplier. And so, to be able to balance that across many supplier partnerships helps at all times. And important to remember here that this just contributes to the treasure hunt experience in the stores and that customers are used to changes in items, and they get excited by new and different items showing up with great value on a regular basis.

I always come back to the partnerships we have with suppliers, strong, long-lasting partnerships. We're a solutions provider to them. We partner strategically on long-term goals. We follow a customized approach. We work creatively. All of these things, they're long term in nature, so they help during any short-term fluctuations that we see. And that again has been true throughout our history. And then I'd also point to focus on new supplier acquisition as a real strength in pre-COVID times with the amount of change in the supplier landscape, but certainly now as it's benefited us both with traditional and non-traditional suppliers. And we've mentioned previously on the non-traditional side, we continue to see opportunities from foodservice, hospitality, more recently, cruises and hotels and fitness centers and other opportunities that have come our way.

Maybe last point I'll make on opportunistic supply, I continue to be bullish on a long-term opportunity here. Manufacturers have increased production. They don't want to get caught again like what happened back in March and April. I'll say we've already seen some opportunities that have come