PA Grocery Chain Planning Dozens Of Store Closures

Discount supermarket chain Grocery Outlet plans to close dozens of locations as it charts a path out of financial difficulties stemming from recent expansion efforts, which have included a focus on Pennsylvania.

The grocer on Wednesday announced it plans to close 36 stores over the next year as part of an "optimization plan."

"We identified 36 stores in the network that we concluded did not have a viable path to sustained profitability," CEO Jason Potter said on the company's quarterly earnings call.

Of those 36 to-be-closed stores, 24 are located in the eastern part of the U.S., where the retailer has recently expanded. That has included opening new stores in Pennsylvania in recent years: There are currently over three dozen in the state.

"It's clear now that we expanded too quickly, and these closures are a direct correction," Potter said.

According to a list obtained by Action News, Pennsylvania closures include two locations in Philadelphia as well as a store in Kennett Square.

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Grocery Outlet has 570 stores across 16 states. Grocery Outlet is a discount grocery chain with a unique independent operator business model, which differs from typical franchises in that store managers profit-share with the company based on the store's performance over time.

Despite the planned closures, Grocery Outlet is also set to open new locations.

The company will open "another 30 to 33 net new stores in 2026," Potter said.

"We plan to expand with a more clustered model to improve supply chain efficiency and marketing leverage," he said.

Grocery Outlet saw net sales increase during the last quarter, up around 11% compared to the same time the year before. But it recorded an operating loss of $234.8 million.

Potter said increased consumer pressure and competition, along with disruptions to government assistance programs during last year's government shutdown were partly to blame.

Grocery Outlet isn't the only supermarket company eyeing closures.

Kroger announced plans last year to close 60 stores.

Amazon in January announced it would close every single one of its Amazon Fresh and Go stores nationwide. Some of its Pennsylvania locations could be repurposed into Whole Foods Markets.