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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Presentation
Executive
Eric Lindberg

deleverage due to higher costs related to protecting our employees and our customers during COVID-19.

As we move forward, we will continue to reinvest productivity savings and leverage our flexible business model to drive long-term growth. Consistent with that philosophy, we are accelerating our investments in people and capabilities across three areas: first, advancing how we buy as we further develop our infrastructure to drive a wider gap in our leadership position in secondary market; second, advancing how we sell by improving our ability to attract the very best operator candidates and prepare them for success and by making our extraordinary network of IOs even better; and third, continuing to scale our business to support 10% annual unit growth.

RJ will speak in a moment about the first area of reinvestment, how we buy. My discussion today will begin with the second area, how we sell, which is centered all around our IOs. We continue to expand our network of field-based educators to more effectively support our existing IOs, as well as train and develop our newer operators. In terms of recruiting our new operators to the system, we are utilizing our digital marketing capabilities to more effectively target and recruit new operator candidates. While early, we are pleased to see the quality and the strength of incoming inquiries we receive from both those with traditional retail experience as well as other relevant backgrounds such as hospitality and food service.

As we look for new operators, we know that candidates must have both the right mindset and the right skill set to succeed as IOs. We aggressively search and screen for entrepreneurs who are smart, independent, hungry and humble. While we love to find candidates with existing grocery management experience, equally important to us are vital skills such as customer service, labor management, marketing and leadership. Once identified, these candidates go through an intensive training program, part of which is an in-store immersion experience with a seasoned operator.

In order to make our training program more consistent, scalable and efficient, we're evolving our training approach to leverage the best of our operator, field and corporate teams to create a virtual learning environment. We believe the consistency and rigor provided by virtual training workshops and simulations will be an effective supplement to the in-store training environment. We expect this hybrid approach will help improve the readiness and effectiveness of new operators when they begin managing their new store. We also believe that it will provide a more consistent and scalable training experience as we continue to grow our store base.

Training doesn't stop once the IO first opens their store. Our operators are aggressive and hungry entrepreneurs. We're always looking to develop their skills and grow their businesses. To support that, we provide operational and analytical resources through our field management teams, corporate staff, as well as various data and business intelligence tools. To build upon this support, we're developing new educational content designed to help them further grow and develop