Grocery Outlet Posts Positive Comps After Three Negative Quarters

Grocery Outlet's comparable-store sales grew 0.5% in the third quarter, the discounter announced Tuesday — the first positive print after three straight quarters in the red. Net sales rose just under 1% year over year, to $1.18 billion.

CEO Jason Potter credited the swing to customers responding to the grocer's value messaging. CFO Ian Ferry added that the quarter brought a lower-than-expected sales headwind from the cyclospora outbreak, plus strong traffic and basket sizes. "Our efforts to restore and enhance the attributes that make this business unique and differentiated are starting to resonate with consumers and drive sales improvement," Ferry told investors.

Not a dramatic recovery. A quarter-point of comps is hardly a victory lap. But direction matters, and Grocery Outlet finally has one.

What's actually driving the turnaround?

Potter described a shift "from broad-based synthetic promotions to now surgically deploying investments." Translation: the company stopped spraying discounts and started aiming them.

The 80th anniversary celebration in August is the case study. Targeted marketing highlighted the chain's opportunistic deals, and the three-day event generated double-digit comps and strong units-per-transaction growth, Potter said.

Opportunistic sourcing — the closeout and surplus buying that made Grocery Outlet famous — is the 2026 priority. The goal is straightforward: improve shoppers' price perception of the banner. To make room, the company trimmed parts of its everyday assortment.

"We've activated the entire organization in this effort, starting with our buying and merchandising teams, and partnering with our suppliers and collaborating with our independent operators," Potter said. "We've made some important trade-offs. One example is to reduce elements of our everyday assortment to ensure we make the space for opportunistic products in our supply chain."

Alongside the "compelling assortment," the grocer kept everyday assortment pricing competitive in Q3. It also installed new signage, updated digital outreach, launched a "more shoppable website" and sharpened messaging around deals and discovery, Potter said.

The timing helps. "As inflation continues to pressure household budgets and more shoppers cite value as their top purchase criteria, we're working to ensure our offering is increasingly relevant," Potter said.

Growth and guidance

The company opened 14 stores during the quarter and expects to close the fiscal year with roughly 30 new locations — a pace of about one opening every five weeks through the rest of the year.

It also raised its outlook. Full-year comp sales are now expected between 0.2% and 0.4%, up from the prior projection of -0.5% to 0%. Modest numbers, admittedly. But a raised range beats a lowered one, and Grocery Outlet has delivered enough lowered ones lately.

"We're confident in our ability to build off the results of the work we've done this year and drive towards sustainable, profitable growth," Ferry said. "Near term, we remain focused on getting more opportunistic product into our stores across more departments, ensuring our value proposition is well communicated to customers, and managing the business with discipline."

What does this change for the discount grocery space? For now, it signals that a value-first operator can claw back traffic without blanket price cuts — assuming the opportunistic pipeline stays full.