A popular discount grocery chain announced plans to close dozens of stores.
Grocery Outlet will close 36 underperforming stores, which account for 6% of its fleet, as it faces an estimated $235 million in operating loss and more than $218 million in net loss, according to GroceryDrive.com.
Many of the stores are located on the East Coast and the closures will represent 30% of the region’s store count. Grocery Outlet President and CEO Jason Potter confirmed that the other 51 stores located in the East Coast region were still viewed as profitable to the company.
“We are not fully exiting any state, and we believe we have a meaningful opportunity to grow in the East over the long term, however, it’s clear now that we expanded too quickly,” Potter said via GroceryDrive.com.
Grocery Outlet has faced challenges in recent months, having detailed several key changes including remodeling, hiring and ordering guides during its last earnings call. The discounter reportedly experienced a double-digit decrease in EBT sales amid a temporary national lapse in SNAP funding and saw a significant decrease in December during the highly anticipated promotional holiday period.
Grocery Outlet was reportedly seeing a decline in units per transaction and a halt in traffic growth by January and, despite a net sales increase of nearly 11%, saw its comparable-store sales decrease by nearly 1%.
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