Grocery Outlet restarts expansion with new California branches
Grocery Outlet is opening new locations in California and rebuilding its network in the Golden State after closing its stores earlier this year.
A new location in Ontario Ranch is scheduled to open July 23, with more locations slated to open later this summer.
The location will be operated by independent owners Gloria and Jason Pineda. The discount grocer also plans to open stores in Ramona, San Francisco, Clovis and Petaluma by the end of August.
The Emeryville, Calif.-based chain announced the closure of 36 stores in March, including nine locations in California. The closures were an attempt to undo overexpansion in the wrong markets, resulting in a loss in 2025. Grocery Outlet did not announce which stores would be closed at the time, but those locations were identified by consulting firm Gordon Bros. Listed for sublease by.
Among those listed was an Ontario location less than seven miles from the soon-to-open facility.
Five other Southern California locations in Azusa, Brawley, El Cajon, La Habra, Ontario and Poway are scheduled to close. In Central California, Kerman, Patterson and Ridgecrest stores are also listed for sublease. Besides California, stores in Idaho, New Jersey, Maryland, Ohio and Pennsylvania were also listed.
In a May earnings call, Grocery Outlet Chief Executive Officer Jason Potter said the restructuring helped boost the company’s profits.
“These closures are now complete and will improve fleet quality and strengthen the earnings profile of the business over time,” he said.
Grocery Outlet was founded in San Francisco in 1946 as a discount grocery chain that sold overstock of limited-time or holiday food items. There are approximately 280 Grocery Outlet stores in California, accounting for more than half of the total number of stores.
While Grocery Outlet has built a dedicated consumer base through TikTok and other social media posts from grocery hunters, it faces fierce competition from other affordable grocery chains, including Aldi, which is scheduled to open 180 stores in 2026. It also competes with Trader Joe’s, Walmart and Amazon, which are gaining repeat customers.
Last year, it was also hurt by a disruption in federal food aid during a 43-day government shutdown.
In the wake of rising grocery prices and economic concerns, some low-income shoppers who would once shop at affordable grocery chains like Grocery Outlet are turning to food banks instead. Accordingly Los Angeles Regional Food Bank1.2 million people visit food banks per month.
Grocery Outlet’s net sales rose 4% to $1.17 billion in the first quarter compared to the previous year. It recorded a net loss of $180 million during the period.
He said the locations were closed as part of the optimization plan. It also went through a store renovation program, changing products and clustering locations to increase profits and customer traffic.
“Our value-driven product offering continues to resonate with consumers. While we are encouraged by the progress we are beginning to see, we are not satisfied with our current level of performance and are focusing on the job ahead of us,” Potter said on the earnings call.
Grocery Outlet shares are down more than 25% in the last 12 months. The Dow Jones industrial average is up more than 15% over the same period.
