Grocery Outlet to Acquire United Grocery Outlet

Deal includes 40 UGO locations in the southeast and positions grocer for expansion in this region of the country
Greg Sleter
Grocery Outlet
Grocery Outlet had previously announced plans to open between 55 and 60 new stores in 2024.

Grocery Outlet Holding Corp. has reached an agreement to acquire United Grocery Outlet, an extreme value, discount grocery retailer operating throughout the Southeastern United States, from affiliates of Gen Cap America, Inc. and current and former UGO management. 

With 40 stores and a distribution center, the acquisition of UGO will expand Grocery Outlet's presence into Tennessee, North Carolina, Georgia, Alabama, Kentucky and Virginia.

"United Grocery Outlet is a natural fit given our similar opportunistic buying strategies, customer value propositions, and shared mission of serving our communities,” said RJ Sheedy, president and CEO of Grocery Outlet. “This acquisition provides Grocery Outlet with scale in a new region as well as a platform for future expansion in the Southeast.”

Founded 50 years ago, United Grocery Outlet offers customers savings within a treasure hunt shopping environment. The grocer maintains strong relationships with national and regional brands, which enables it to provide quality food at “extreme values.” 

"We are thrilled to become part of Grocery Outlet and to have found a partner who shares our mission and business strategy,” said Lisa Bryson, CEO of United Grocery Outlet. “Together, we look forward to growing the positive impact on our community." 

The acquisition is anticipated to close early in the second quarter, subject to customary closing conditions. In addition to the newly acquired UGO stores, Grocery Outlet plans to open 15 to 20 stores in existing markets in 2024, for a total of 55 to 60 net new stores this year. The acquisition is expected to be modestly accretive to the company's 2024 earnings and will be discussed in more detail on the company's fourth quarter and full fiscal year 2023 earnings call scheduled for Tuesday, Feb. 27.

Emeryville, Calif.-based Grocery Outlet offers products sold through a network of independently operated stores at more than 460 locations in California, Washington state, Oregon, Pennsylvania, Idaho, Nevada, Maryland, New Jersey and Ohio. The company is No. 66 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America

This article first appeared in Progressive Grocer's sister's publication Store Brands

This ad will auto-close in 10 seconds