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Grocery Outlet Looks to Build on Its Differentiated Model

Company continues on expansion path, even as comparable and net store sales dip for the quarter and year
Lynn Petrak, Progressive Grocer
Grocery outlet
Despite losses during the last quarter and fiscal year, Grocery Outlet is investing in new stores and building off more positive topline trends.

It’s that time of year when many food retailers release their fourth quarter and yearly financial results and, based on its report, Grocery Outlet Holding Corp. is springing ahead into 2022 to capture more sales and expand its foothold. 

Given the fact that there was an extra week in 2020, there were some anticipated declines for Grocery Outlet, both in the final quarter and during its overall fiscal year. According to the new financial report, net sales decreased by 3% during the fourth quarter to $782.7 million, while comparable sales during that time frame dipped 1.2% compared to a 7.9% increase during fourth quarter in 2020.

For the year, net sales dropped 1.8% to $3.08 billion. Comparable store sales were 6% lower in 2021 versus a 12.7% gain from 2019 to 2020, a year when consumers largely stuck close to home.

While there were losses including an adjusted EBITA slide 11.0% for the year Grocery Outlet focused much of its efforts in 2021 on expansion. The company opened 36 new stores last year, including eight locations in the fourth quarter.

“We are pleased with our fourth quarter results as we delivered better-than-expected topline and gross margin performance. Through the tireless efforts of our independent operators along with our unique and flexible buying model, we continue to deliver unbeatable value and service to our customers and local communities,” said Eric Lindberg, CEO at Grocery Outlet. “As we look forward, we are confident that the strength of our differentiated model combined with our strategic initiatives and a more favorable operating environment position us well for long term growth.”

On that point, Grocery Outlet shared its projections for its full fiscal 2022, anticipating net sales between $3.33 billion and $3.38 billion and a 4% to 5% bump in comparable store sales.  The company remains on a growth track for store openings, planning four new locations during the first quarter of 2022 and 28 total stores for the year.

Based in Emeryville, Calif., Grocery Outlet has more than 400 stores in California, Washington, Oregon, Pennsylvania, Idaho and Nevada. The company is No. 69 on The PG 100, Progressive Grocer’s 2021 list of the top food and consumables retailers in North America.

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