Grocery Outlet resumes California expansion with new stores

Discount grocery chain Grocery Outlet is reopening locations across California after closing 36 stores in March, including nine in the state. The company plans to open a new store in Ontario Ranch on July 23, followed by additional sites in Ramona, San Francisco, Clovis and Petaluma by the end of August. The closures were part of a restructuring effort to correct overexpansion, which contributed to a Q1 net loss of $180 million despite a 4% rise in sales to $1.17 billion.

CEO Jason Potter said the shutdown of underperforming stores has improved the fleet and will strengthen earnings over time. Grocery Outlet, founded in San Francisco in 1946, now operates about 280 California stores, representing more than half of its total footprint. The chain faces intensified competition from Aldi, Trader Joe’s, Walmart and Amazon, and has seen some low‑income shoppers shift to food banks amid rising grocery prices.

Shares have fallen more than 25% over the past year, while the broader market has risen, underscoring the challenges the discount retailer continues to navigate.