CALIFORNIA STATE – Grocery Outlet is shrinking its national footprint after a period of rapid expansion, closing nine stores in California and another 27 across five other states.
The Emeryville-based discount grocery chain announced the closures in March as part of a broader business “optimization plan.” By May, Grocery Outlet reported that all 36 affected stores had closed.
The California locations were concentrated in Southern California and the Central Valley. No Bay Area Grocery Outlet stores were included in the closure program.
The Full List of California Grocery Outlet Closures
The nine affected California stores are:
- Azusa — Southwest corner of Citrus Avenue and East Alosta Avenue
- Brawley — 315 Panno Drive
- El Cajon — 350 N. Second Street
- Kerman — 14868 W. Whitesbridge Avenue
- La Habra — 2001 W. Whittier Boulevard
- Ontario — 4420 Ontario Mills Parkway
- Patterson — 2900 Sperry Avenue
- Poway — 13345 Poway Road
- Ridgecrest — 120 N. China Lake Boulevard
The company placed the properties on the market for sublease, with many of the locations also offering their grocery-store furniture, fixtures and equipment for sale. The California stores ranged from approximately 14,000 to 24,000 square feet.
Why Grocery Outlet Closed the Stores
Grocery Outlet described all 36 locations as financially underperforming and said a detailed review found they did not have a viable path to sustained profitability.
“It’s clear now that we expanded too quickly, and these closures are a direct correction,” President and CEO Jason Potter said.
The closures represented approximately 6% of the company’s store fleet. Most were located outside California, including 24 stores on the East Coast and three in Idaho.
The announcement followed a difficult financial year for the retailer. Grocery Outlet reported a $221.7 million operating loss for fiscal 2025, compared with operating income of $78.3 million a year earlier.
Company executives also pointed to increasing promotional competition and delays involving federally funded assistance programs, including Supplemental Nutrition Assistance Program benefits, as factors that affected shoppers during the fourth quarter.
Grocery Outlet Is Still Opening New Stores
The closures do not represent a broad retreat from California or the Bay Area.
Grocery Outlet said it still planned to open approximately 30 to 33 stores during fiscal 2026, using a more concentrated expansion strategy. It also planned to refresh roughly 150 existing locations.
New Bay Area locations have been moving forward even as the company eliminates weaker stores elsewhere. Projects have included new Grocery Outlet markets in San Francisco’s North Beach neighborhood and Oakland, along with a planned Moraga location.
The company operates primarily through independently run stores and remains closely tied to Northern California. Grocery Outlet was founded in San Francisco and is now headquartered in Emeryville, with more than 560 stores across 16 states at the time the closure program was announced.
