Why Grocery Outlet is closing some stores in California

Core Viewpoint - Grocery Outlet is closing 36 underperforming stores nationwide due to overexpansion, with plans to focus on high-performing locations to improve brand awareness and consumer understanding [1][4]. Store Closures - The company will close 36 stores, including nine in California, with specific locations in Southern and Central California identified for closure [2][3]. - Outside California, closures include eight stores in Maryland, six in New Jersey, and six in Ohio, among others, but the company will not exit any state entirely [3]. Financial Performance - Grocery Outlet reported a net loss of $225 million for fiscal year 2025, a significant decline from a net income of $39 million in 2024 [3]. - The company anticipates weaker-than-usual sales due to the lapse of federal food assistance, with November 2025 comparable store sales from EBT down more than 8% compared to the previous year [8]. Strategic Focus - The closures are part of a strategy to build clusters around high-performing stores, allowing for shared expertise among managers [4][7]. - The company aims to open more than 30 new stores in 2026, indicating a continued commitment to growth despite current challenges [3]. Market Position - Founded in 1946, Grocery Outlet specializes in selling discounted overstock items and operates over 560 stores across the U.S., primarily on the West Coast [9].