Grocery Outlet is joining the ranks of retailers planning to shutter storefronts this year.
The discount grocery store chain announced its fourth-quarter and full 2025 fiscal year results on Wednesday, along with a plan to close 36 stores.
This move to close stores follows a previous restructuring plan concluded in the second quarter of fiscal 2025, another attempt to “improve long-term profitability” and optimize growth.
The company reported an increase in net sales, but an operating loss of $234.8 million and a net loss of $218.2 million in the fourth quarter of 2025.
The optimization plan, which is expected to be largely completed during fiscal year 2026, is estimated to result in $14 million to $25 million in net total restructuring charges.
This doesn’t include the company’s estimated gross profit loss due to sales discounts or product markdowns as the impacted locations close.
At the same time, the fourth-quarter fiscal report noted seven store openings. Trade publication Grocery Drive reported that 24 of the closing stores are on the East Coast, and the company does not intend to slow its expansion, even as it experiences closures.
The California-based chain ended the fourth quarter with 570 stores across 16 states, according to its earnings release.
Shares of Grocery Outlet Holding Corp. (Nasdaq: GO) plummeted after its report. The stock closed down more than 27% on Thursday and is down more than 37% year to date.
Fast Company reached out to Grocery Outlet for additional information on which stores will face closures and the expected impact on surrounding areas.
Food access is a growing concern
The ongoing trend of grocery store closures continues to raise concerns about food access. Kroger announced closures last year, sparking conversations in local communities about jobs and grocery deserts.
Food deserts, or communities that are both low-income and lack a grocery store, are becoming more common across the United States. It’s an impact from the 1980s, when the government stopped enforcing the Robinson-Patman Act, an antitrust law that prohibited supplier price discrimination.
Now millions of Americans live in food deserts. Organizations like the Institute for Local Self-Reliance (ILSR) map these food deserts, which can spread in response to these store closures.
More than 280 Grocery Outlet stores are in California, where approximately 2.7 million people live in a food desert, according to ILSR data.