Grocery Outlet to Close 36 Stores After $225M Loss
Grocery Outlet will shutter 36 underperforming stores by year-end after posting a $225 million fiscal 2025 loss on a 7.3% sales increase. This retrenchment highlights intensified margin pressures that also prompted Kroger to restructure following its failed 2024 merger with Albertsons.
1. Grocery Outlet Store Closures Details
Grocery Outlet will shutter 36 underperforming stores and one distribution center by year-end after identifying locations without a viable path to profitability. The chain reported a net loss of $225 million for fiscal 2025 on net sales up 7.3%, and plans to open 30 to 33 new stores in 2026.
2. Sector-wide Margin Pressures
Inflation-driven consumer belt-tightening and rising labor costs have forced Grocery Outlet, Kroger and Albertsons to close locations and cut headcount. The rollback by Grocery Outlet underscores the challenges of maintaining margins in value-focused grocery retailing after rapid expansion.
3. Implications for Kroger
Kroger has been executing a restructuring plan since its 2024 merger attempt with Albertsons collapsed, including the closure of 60 stores last year. Competitor downsizing may ease some local pricing competition but also signals persistent strategic and margin hurdles for Kroger’s optimization efforts.