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By Mike Stone and Soyoung Kim
NEW YORK, June 16 (Reuters) - Discount supermarket chainGrocery Outlet is exploring a sale that is expected to value thebargain retailer at more than $1 billion, according to peoplefamiliar with the matter.
Grocery Outlet's private-equity owner, Berkshire PartnersLLC, has hired Barclays and Goldman Sachs to runa sale process for the Berkeley, California-based food marketchain, the people said on Monday.
Grocery Outlet bets on U.S. consumer frugality in leaneconomic times, offering about half off traditional supermarketprices by selling manufacturers' excess inventory.
All the people asked not to be named because the matter isnot public. Representatives for Grocery Outlet and Goldman Sachsdid not immediately respond to requests for comment. BerkshirePartners and Barclays declined to comment.
Supermarket deals have been on the upswing, with Kroger Co purchasing Harris Teeter last year and private-equityfirm Cerberus Capital Management LP striking a $9 billion dealfor Safeway Inc.
Grocery Outlet has about $100 million in earnings beforeinterest, tax, depreciation and amortization and could sell formore than 10 times that figure, some of the people said.
Grocery Outlet has more than 180 stores in Pennsylvania andseveral states in the Western United States includingCalifornia, Washington and Oregon.
Founded by Jim Read in San Francisco in 1946, the chaininitially sold government-surplus canned goods. Read's grandson,MacGregor Read, is currently co-CEO of the company.
In the past decade, Grocery Outlet has evolved into carryinga full line of groceries, including fresh items includingproduce, meat and milk. Organic goods and beer and wine arefast-growing categories within the retailer. (Additional reporting by Greg Roumeliotis and Olivia Oran inNew York; editing by Matthew Lewis)
