Share and Follow
A well-known discount grocery chain celebrated for offering name-brand food at bargain prices is set to close several of its locations across the United States after acknowledging it grew too fast.
Grocery Outlet, based in California and renowned for its deep discounts, has announced plans to shut down 36 stores across the country. This decision is part of a comprehensive restructuring effort aimed at boosting profitability.
The company shared this update while releasing its latest financial results, noting that a thorough ‘strategic, financial, and operational analysis’ had been conducted on its entire network of stores.
“To enhance long-term profitability, generate better cash flow, improve operational efficiency, optimize our current store locations, and align with our carefully considered strategy for new store expansion, we undertook a strategic review of our store network,” the company stated in its earnings report.
Following this extensive review, company leaders concluded that numerous stores were not sustainable in the long term.
Chief executive Jason Potter told investors the chain identified 36 stores that ‘did not have a viable path to sustained profitability.’
‘It’s clear now that we expanded too quickly, and these closures are a direct correction,’ Potter said during the company’s earnings call.
The closures represent roughly 6 percent of the company’s store network, which currently includes more than 560 locations across 16 states.
Grocery Outlet – the California-based retailer famous for selling products at steep discounts – says it will close 36 stores nationwide as part of a sweeping restructuring plan designed to improve profitability
Most of the affected stores are expected to be in the eastern US, though the company said it is not exiting any state entirely.
The plan also includes ending agreements with some independent operators, terminating or subleasing certain store leases, and exiting a distribution center facility that is no longer being used.
Several of the closures will take place in California, where the company is headquartered.
Stores in cities including Azusa, Brawley, El Cajon, Kerman, La Habra, Ontario, Patterson, Poway and Ridgecrest are among those expected to shut down.
The closures will not happen overnight.Â
Instead, Grocery Outlet says the process will unfold gradually and is expected to be largely completed by the end of 2026.
Founded in 1946, Grocery Outlet built its reputation on a discount model that sells name-brand groceries at up to 60 percent below typical supermarket prices.
The chain is particularly known for its ‘treasure hunt’ shopping experience, where inventory changes frequently based on surplus deals and closeout products available from suppliers.
Most of the affected stores are expected to be in the eastern US, though the company said it is not exiting any state entirely
Despite shuttering dozens of locations, Grocery Outlet says it is not retreating from expansion entirely. The company still plans to open around 30 to 33 new stores in 2026
Each store is independently operated, and many shoppers visit regularly to hunt for deeply discounted items that may only be available for a short time.
The restructuring comes after a difficult financial year for the company.
Although net sales rose, Grocery Outlet reported a large operating loss tied partly to impairment charges and restructuring costs related to store closures.
Company leaders also pointed to a tougher environment for discount retailers.
According to Potter, several factors weighed on performance, including increased competition, heavy promotions across the grocery industry and delays in government food assistance benefits used by many customers.
Despite shuttering dozens of locations, Grocery Outlet says it is not retreating from expansion entirely.
The company still plans to open around 30 to 33 new stores in 2026, part of a more disciplined growth strategy moving forward.
Executives say the goal is to refocus on stronger-performing markets while refreshing stores and strengthening the company’s value proposition for shoppers hunting for bargains.