What started as an agreement written on a bag nearly five decades ago recently took the owners of a Redmond discount grocery store to New York.

Vince and JoHanna Downs, third generation owner/operators of the Redmond Grocery Outlet Bargain Market, were part of a group representing the Emeryville, California-based company at its initial public offering at the Nasdaq Stock Market in Times Square.

Vince’s late grandfather, Leonard Downs, signed the company’s first independent operator agreement with Grocery Outlet founder Jim Read in 1973. The agreement, signed on the back of a grocery bag that’s now on display at Grocery Outlet’s Bay Area headquarters, created what was then known as Redmond Canned Foods in a building where Leonard Downs had previously operated an International Harvester dealership. Grocery Outlet now has different owners for most of its more than 300 stores in five western states and Pennsylvania.

Read had been vacationing at Black Butte Ranch when he met Vince’s grandfather, Vince said. While Read had run stores in the Bay Area, they were a different concept. After talking, Read and Leonard Downs agreed on selling surplus canned goods on a consignment basis, creating the system that made the store successful.

The store at 798 NW 5th St. is still in operation, though it took on the Grocery Outlet name in 1987, Vince said. It now has around 25 employees.

Family atmosphere

Leonard, who died in 1999, eventually passed the store on to his son Bob Downs and Bob’s wife, Carol. Now they are mostly retired and the store belongs to Vince and JoHanna, with help from Vince’s brother, Brian.

Today, some old parts from the tractor dealership are still scattered about the upstairs area near the office the Downses run the store out of. And the basic agreement of the company and franchisees splitting revenue is still in place. But the inventory has changed quite a bit.

“The store’s evolved big time,” JoHanna Downs said. “Almost every grocery item you want, we have. Back in the ‘70s, it was, literally canned food on the floor.”

The store now sells organic items, staples like milk and bread and a variety of closeout items that could come from any part of the country or even different times of year.

“We’ll sell Coca-Cola with Santa Claus on it in June,” JoHanna said. “A conventional grocery store would never do that, but what do you care if you save $2 on it?”

One of the thrills of working in the super-low cost business is when new customers come in, JoHanna said.

“I love seeing that new customer just get it and say,’Oh my gosh, they sell this at Whole Foods for $10 and we have it for $2.99,’ ” she said. “It’s really cool to feed folks with high-quality food at a really, really great price.”

One thing that hasn’t changed is the store’s commitment to the community, Vince said.

And the Redmond Grocery Outlet’s shoppers love the company in return.

“The Downs family is fantastic,” said Kristy Cross of Terrebonne. “It’s one of the best run stores and fun to go to. You never know what you will find. It’s kind of an adventure.”

Cross said she’s been to Grocery Outlet stores across the Northwest and finds the Redmond location to be the best.

“It’s very well organized and bright,” she said. “The employees are just awesome.”

Trip of a lifetime

The Downses jumped at the chance to attend Grocery Outlet’s IPO when they were asked about representing the company’s independent operators a couple weeks before the June 20 event, they said. Bob, who had been with the store since 1974, and Carol also came along on the trip.

“It was a huge honor for us,” JoHanna said. “It was something you don’t think you’ll ever be a part of.

They flew to New York Tuesday June 18 and attended an event that evening. The next day they explored the city and attended a Grocery Outlet dinner with 120 people.

The next morning, the Downses were on hand as Grocery Outlet officials rang the Nasdaq opening bell. JoHanna said they stood in place for three minutes as different networks took turns showing the event. Confetti bombs went off in the room overlooking Times Square as company heads Eric Lindberg and MacGregor Read pushed the button.

“Times Square was draped in the Grocery Outlet logo,” JoHanna said. “We felt so proud to be a part of it.”

They watched the first trade of the stock being completed, which took nearly three hours, JoHanna said.

After they left the Nasdaq, the Downses visited the National Sept. 11 Memorial, which JoHanna called surreal after the “huge high” earlier in the day. That evening, they attended a celebration Nasdaq played host to on a balcony overlooking Times Square.

Initial price targets put the stock’s opening price at between $15 and $17 per share, but that jumped to $22 the morning of the IPO. It closed at $31 June 20 and has since topped $39.

Having been longtime friends with the Read family, the experience for the Downses was special.

“A lot of the people there were people I grew up with,” Vince said. “It was great just kind of experiencing it all with my parents, especially knowing how hard they worked to get to be a part of it.”

While the Downses ran Grocery Outlet’s Bend store briefly in the early 2000s, they now say they don’t want to add locations other than Redmond.

“That would be hard the way we run the store,” Vince said. “We’re down on the floor every day, working hand in hand with our staff.”

— Reporter: 541-548-2186, gfolsom@redmondspokesman.com