California Budget Chain Grocery Outlet Closes 12 Stores

These closures are part of a larger plan the company announced back in March to shut 36 underperforming stores across the country.

Rudy Blalock

Published: 8/19/2026, 11:32:46 PM EDT

California Budget Chain Grocery Outlet Closes 12 Stores — A Grocery Outlet store in San Rafael, Calif., on Feb. 25, 2025. (Justin Sullivan/Getty Images)

Popular budget grocery chain Grocery Outlet has closed 12 stores this quarter, including eight in California, as the discount grocery chain works through a bigger plan to shut down dozens of underperforming locations.

New Closures Hit California Hardest

Chief Financial Officer Ian Ferry said the company closed 12 stores and opened 10 new ones during the second quarter during the company's Aug. 12 earnings call.

Eight of those closed stores were in California, according to leases published by restructuring firm Gordon Brothers. The closed California stores were located in Brawley, El Cajon, Kerman, La Habra, Ontario, Patterson, Poway, and Ridgecrest.

The list also included leases available for other previously closed stores, including three stores in Idaho, six in Maryland, four in New Jersey, six in Ohio, and three in Pennsylvania. Ferry said 17 new stores have opened so far this year.

These recent closures are part of a larger plan the company announced back in March to shut 36 underperforming stores across the country.

President and CEO Jason Potter said at the time that the company had grown too fast, saying, "It's clear now that we expanded too quickly, and these closures are a direct correction.”

Most of those planned closures, 24 out of 36, were set for the eastern United States. Potter said Grocery Outlet was "not fully exiting any state" and still saw "meaningful opportunity to grow in the East over the long term.”

By the end of the second quarter, the company had finished closing all 36 of those stores, according to the company's second quarter earnings press release.

Sales and Profits Improve

Despite the closures, Grocery Outlet's overall sales grew during the second quarter, which ended July 4.

Net sales rose 1.1 percent to $1.19 billion compared with the same time last year. The company earned $5.6 million in net income, or 6 cents per share, up from $5 million, or 5 cents per share, a year earlier. Potter said the quarter's results beat the company's own predictions.

"We delivered second-quarter results ahead of our outlook, as efforts to strengthen our opportunistic offering and value perception gained traction," Potter said in a statement.

On the earnings call, Potter said the company expects to save $12 million a year once the closures are fully in effect, with most of that benefit showing up in 2027. He also said the company is welcoming a new chief financial officer, Ian Ferry, after Chris Miller retired from the role.

Grocery Outlet raised the lower end of its full-year sales and profit predictions after the strong quarter. The company still plans to open 30 to 33 new stores this year, even as it works to close weaker ones.

Potter said the company is also watching a multi-state Cyclospora outbreak that has hurt produce sales industrywide, though he said Grocery Outlet's own products have not been part of any related recalls.