−Removed: Grocery Outlet is a high-growth, extreme value retailer of quality, name-brand consumables and fresh products sold through a network of independently operated stores.
−Removed: As of December 30, 2023, we had 468 stores in California, Washington, Oregon, Pennsylvania, Idaho, Nevada, Maryland, New Jersey and Ohio.
+Added: Grocery Outlet is a high-growth, extreme value retailer of quality, name-brand consumables and fresh products sold primarily through a network of independently operated stores.
+Added: As of December 28, 2024, we had 533 stores in California, Washington, Oregon, Pennsylvania, Tennessee, Idaho, Maryland, Nevada, North Carolina, New Jersey, Georgia, Ohio, Alabama, Delaware, Kentucky and Virginia.
Our headquarters is in Emeryville, California.
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Our flexible buying model allows us to offer quality, name-brand opportunistic products at prices generally 40% to 70% below those of conventional retailers.
−Removed: Entrepreneurial independent operators ("IOs") run our stores and create a neighborhood feel through personalized customer service and a localized product offering.
−Removed: This differentiated approach has driven consistent comparable store sales growth and allowed us to produce positive comparable store sales in 20 of the last 21 years.
+Added: Our Grocery Outlet stores are primarily run by entrepreneurial independent operators ("IOs") who create a neighborhood feel through personalized customer service and a localized product offering.
+Added: This differentiated approach has driven consistent comparable store sales growth, and we have had positive comparable store sales for over 20 years, with the exception of fiscal 2021, due primarily to the heightened demand during the onset of the COVID-19 pandemic in 2020.
Our differentiated model for buying and selling delivers a "WOW!" shopping experience, which generates customer excitement, inspires loyalty and supports profitable sales growth:
• How we buy:
−Removed: We source quality, name-brand consumables and fresh products opportunistically through a large, centralized purchasing team that leverages long-standing and actively managed supplier relationships to acquire merchandise at significant discounts.
+Added: We source quality, name-brand consumables and fresh products opportunistically through a centralized purchasing team that leverages long-standing and actively managed supplier relationships to acquire merchandise at significant discounts.
Our speed and efficiency in responding to supplier needs, combined with our specialized supply chain capabilities and flexible merchandising strategy, enhance our access to discounted products and allow us to turn inventory quickly and profitably.
−Removed: Our buyers proactively source on-trend products based on changing consumer preferences, including a wide selection of Natural, Organic, Specialty and Healthy ("NOSH") products.
−Removed: We also source everyday staple products to complement our opportunistic offerings.
+Added: Our buyers proactively source on-trend products based on changing consumer preferences, including a wide selection of Natural, Organic, Specialty or Healthy ("NOSH") products.
+Added: We also source everyday staple products and have recently introduced our own private label products to complement our opportunistic offerings.
Each store offers a curated and ever-changing assortment of items, creating a "buy now" sense of urgency that promotes return visits and fosters customer loyalty.
• How we sell:
−Removed: Our stores are independently operated by entrepreneurial small business owners who have a relentless focus on selecting the best products for their communities, providing personalized customer service and driving improved store performance.
+Added: Our Grocery Outlet stores are independently operated by entrepreneurial IOs, who are small business owners that have a relentless focus on selecting the best products for their communities, providing personalized customer service and driving improved store performance.
Unlike a store manager of a traditional retailer, IOs are independent businesses and are responsible for store operations, including ordering, merchandising and managing inventory, marketing locally and directly hiring, training and employing their store workers.
−Removed: IOs initially contribute capital to establish their business and share store-level gross profits with us.
+Added: IOs initially contribute capital to establish their business and generally share 50% of store-level gross profits with us.
These factors both align our interests and incentivize IOs to grow their business profitably to realize financial upside.
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We believe that our broad customer appeal supports significant new store growth opportunities, and we plan to continue to expand our reach to additional customers and geographies across the United States.
−Removed: Our stores generally have performed well across all economic cycles, as demonstrated by our pattern of positive comparable store sales growth and healthy gross margin rates.
−Removed: Our comparable store sales decreased in fiscal 2021 (for the first time in 18 years) as we lapped heightened demand during the onset of the COVID-19 pandemic in 2020.
−Removed: Our business returned to have positive comparable store sales in fiscal 2022 and 2023.
+Added: Our stores generally have performed well across all economic cycles, and for the vast majority of our history, we have had positive comparative sales growth and healthy gross margin rates.
Our model also is somewhat insulated from store labor-related variability because IOs directly employ their store workers.
The result is a highly scalable business with lower corporate fixed costs, providing further protection in the event of an economic downturn and growth opportunities in a strong economy.
−Removed: As discussed below under "Acquisition of United Grocery Outlet" on February 14, 2024, Grocery Outlet Inc., our wholly owned subsidiary, entered into a stock purchase agreement to acquire BBGO Acquisition, Inc., a holding company that owns all of the outstanding capital stock of The Bargain Barn, Inc., which does business as United Grocery Outlet ("United Grocery Outlet").
−Removed: The transaction is expected to close early in the second quarter of fiscal 2024 and remains subject to customary closing conditions.
+Added: On April 1, 2024, Grocery Outlet Inc., our wholly owned subsidiary, acquired The Bargain Barn, Inc., which does business as United Grocery Outlet ("United Grocery Outlet," or "UGO"), which included 40 stores in six adjacent states we did not operate in as of such date (Tennessee, North Carolina, Georgia, Alabama, Kentucky and Virginia) and a company-operated distribution center.
+Added: See NOTE 15—Business Combination to our Consolidated Financial Statements for additional information.
+Added: The acquisition provides us with the opportunity to scale in a new region and is a platform for potential future expansion in the Southeast.
+Added: Throughout this report, the discussion of our business, stores, operations and strategies generally refers to our IO-operated stores.
+Added: As of December 28, 2024, 42 stores, including the 40 acquired United Grocery Outlet stores, were Company-operated stores.
+Added: Unless otherwise specifically disclosed in this report, the impact of the United Grocery Outlet stores in aggregate were not material to our operations and our consolidated financial statements in fiscal 2024.
Our founder, Jim Read, pioneered our opportunistic buying model in 1946 and subsequently developed the IO selling approach, which harnesses individual entrepreneurship and local decision-making to better serve our customers.
Underlying this differentiated model was a mission that still guides us today:
−Removed: "Touching Lives for the Better." Since 2006, the third generation of Read family leadership, Eric Lindberg, Jr., Chairman of our Board of Directors and former Chief Executive Officer, has continued to advance this mission.
+Added: "Touching Lives for the Better." Since 2006, the third generation of Read family leadership, Eric Lindberg, Jr., Chairman of our Board of Directors (the "Board") and former Chief Executive Officer, has continued to advance this mission.
Grocery Outlet Holding Corp.
was incorporated in Delaware on September 11, 2014.
−Removed: In June 2019, we completed the initial public offering of our common stock.
−Removed: Our common stock trades on the Nasdaq Global Select Market under the symbol "GO".
+Added: Our common stock has traded on the Nasdaq Global Select Market under the symbol "GO" since 2019.
Our Growth Strategies
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• Expand our footprint.
−Removed: We believe that new store growth remains our biggest driver of long-term stockholder value and continue to believe the success of our stores across a broad range of geographies, population densities and demographic groups creates a significant opportunity to profitably increase our store count in existing and new local regions and states.
+Added: We believe that strategic new store growth remains a significant and critical driver of long-term stockholder value.
+Added: We continue to believe the success of our stores across a broad range of geographies, population densities and demographic groups creates a significant opportunity to grow our profitability and increase returns for our stores in existing and new local regions and states.
We intend to continue to expand our reach to additional customers and geographies across the United States.
+Added: While we continue to believe in our long-term growth potential, we recently reviewed our strategic initiatives and priorities and have determined to simplify our near-term growth strategy in order to build a stronger foundation from which to scale in the future, and to drive sustainable and disciplined growth, profitability and return on invested capital.
+Added: In particular, we reassessed our new store opening strategy for fiscal 2025 and fiscal 2026, the efficiency of certain supply chain investments and our general and administrative cost structure.
+Added: As a result, during the fourth quarter of fiscal 2024, we began to initiate a restructuring plan that is intended to improve our profitability and cash flow generation, optimize the footprint of new store growth and lower our cost base (the “Restructuring Plan”).
+Added: See “Management's Discussion and Analysis of Financial Condition and Results of Operations – Recent Trends and Developments – Restructuring Plan” for additional information.
Products and Pricing
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We have continued to expand our product assortment to meet customer needs, including a wide selection of NOSH, fresh, ethnic and local products.
+Added: In the third quarter of fiscal 2024, we introduced our own private label products and launched over 180 new private-label SKUs across grocery and deli categories.
A typical Grocery Outlet basket is priced approximately 40% lower than conventional grocers and approximately 20% lower than discount retailers.
−Removed: Opportunistically sourced products represent approximately half of our purchasing mix.
+Added: Opportunistically sourced products represent a substantial portion of our purchasing mix.
We refer to our best opportunistic purchases as "WOW!" deals, which generally represent deep discounts of 40% to 70% relative to conventional retailers.
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Our buying strategy is deliberately flexible to allow us to react to constantly changing opportunities and customer preferences.
−Removed: Our centralized sourcing team, consisting of our purchasing and inventory planning groups, have deep experience and decades-long relationships with leading CPG companies.
−Removed: Our team is highly selective when evaluating opportunities
−Removed: available to us and maintains a disciplined yet solutions-oriented approach.
+Added: Our centralized sourcing team, consisting of our purchasing and inventory planning groups, has deep experience and decades-long relationships with leading CPG companies.
+Added: Our team is highly selective when evaluating opportunities available to us and maintains a disciplined yet solutions-oriented approach.
We are always seeking out and developing new supplier relationships to acquire desirable products at discounts that excite our customers.
−Removed: Our inventory planning group collaborates with and supports our buyers to ensure we purchase the appropriate type and quantity of products in order to maintain adequate inventory levels in key product categories.
+Added: Our inventory planning group collaborates with and supports our buyers to evaluate the appropriate type and quantity of products in order to maintain adequate inventory levels in key product categories.
We believe that we have a leading share of the large and growing excess inventory market.
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We typically source these staple products (e.g., milk, eggs, sugar) from multiple suppliers to lower our costs and we generally avoid long-term supply commitments to maintain the flexibility to pursue opportunistic buys as they arise.
−Removed: We also have near-term plans to develop and expand our private label products.
+Added: We believe our recent introduction of our private label products in stores will provide better value and inventory consistency for our customers, as well as deliver better margins for us and our IOs.
Supply Chain and Distribution
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After agreeing to purchase product from a supplier, we move quickly to receive, process and distribute the goods.
−Removed: Our systems, including our new store portal, allow IOs real-time visibility to our inventory, significantly reducing time to shelf.
−Removed: IOs typically order multiple deliveries per week resulting in higher inventory turns, lower shrink and a frequent assortment of new products on shelf.
+Added: Our systems, including our new store portal, are designed to provide IOs visibility to our current inventory, and the anticipated launch of our upgraded real-time order guide in fiscal 2025 is expected to significantly reduce time to shelf.
+Added: IOs typically order multiple deliveries per week resulting in higher inventory turns, lower shrink (defined below) and a frequent assortment of new products on shelf.
+Added: Since the implementation of system upgrades in August 2023, we and our IOs have experienced significant issues with ordering, inventory planning and management and payment processing.
+Added: See “Business Technology” for additional information.
We also have dedicated teams to handle unique situations in which products need to be reconditioned or relabeled for sale.
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Deliveries to our stores occur from our distribution centers or directly from our suppliers.
−Removed: We distribute inventory through eight primary distribution centers, three of which we operate and five of which are operated by third parties.
−Removed: We have an in-house transportation fleet as well as strong transportation partner relationships that provide consistent performance and timely deliveries to our stores.
+Added: As of December 28, 2024, we distributed inventory through nine primary distribution centers, four of which we operate (for dry goods) and five of which are operated by third parties (for cold items, produce and dry goods).
+Added: We have an in-house transportation fleet as well as a strong relationship with a third-party transportation partner that together provide consistent performance and timely deliveries to our stores.
We intend to continue to invest in our distribution and logistics infrastructure in order to support our anticipated store growth over the long term, including as we enter into new geographies.
+Added: We are shifting our planned investments in our distribution infrastructure in fiscal 2025 and fiscal 2026 away from highly capital-intensive projects.
+Added: We will instead invest in lower cost distribution centers for dry goods to enhance capacity and improve inventory management and overall execution.
+Added: See “Management's Discussion and Analysis of Financial Condition and Results of Operations – Recent Trends and Developments – Restructuring Plan” for additional information.
Independent Operators
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We encourage the IOs to establish local roots and actively participate in their communities to foster strong personal connections with customers.
−Removed: We generally share 50% of store-level gross profits with IOs, thereby incentivizing them to grow their business profitably and realize financial upside.
+Added: We generally share 50% of store-level gross profits with IOs, thereby incentivizing them to grow their business profitably to realize financial upside.
The independent operator agreement (the "Operator Agreement") that we sign with each IO gives the IO broad responsibility over store-level decision-making, unlike a store manager of a traditional retailer.
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Our collaborative relationship with the IOs creates a powerful selling model allowing us to deliver customers exceptional value with a local touch.
−Removed: As of December 30, 2023, 466 of our 468 stores were operated by IOs.
+Added: As of December 28, 2024, 491 of our 533 stores were operated by IOs, with the remaining 42 stores currently operated by us while we evaluate the timing to transition such stores to our IO model.
+Added: Forty of such Company-operated stores are under the brand name United Grocery Outlet and two of such stores are under the brand name Grocery Outlet Bargain Market.
We have entered into an Operator Agreement with each IO, which grants that IO a license to operate a particular Grocery Outlet Bargain Market retail store and to use our trademarks, service marks, trade names, brand names and logos under our brand standards.
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IOs choose merchandise from our order guide according to their knowledge and experience with local customer purchasing trends, preferences, historical sales and other related factors.
−Removed: IOs are able to uniquely display and merchandise product in order to appeal to their local customer base.
+Added: IOs are able to uniquely display and merchandise products in order to appeal to their local customer base.
IOs also have discretion to adjust pricing in response to local competition or product turns, provided that the overall outcome based on an average basket of items comports with our reputation for selling quality name-brand consumables and fresh products and other merchandise at significant discounts.
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Our relationship with the IOs is an important part of our business.
−Removed: To alleviate the disruption caused by the system upgrades that we implemented in late August 2023 and are more fully described below under "Business Technology", we elected to provide incremental commission support to IOs beginning in the third quarter of fiscal 2023 and extending into the first quarter of fiscal 2024.
+Added: To alleviate the disruption caused by the system upgrades that we implemented in late August 2023 and as more fully described below under "Business Technology," we elected to provide commission support to IOs beginning in the third quarter of fiscal 2023 through fiscal 2024.
+Added: We continue to provide minimal commission support to IOs for inventory shrinkage.
We lease and build out each Grocery Outlet location.
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Upon entering a store, customers are greeted by signage introducing the IOs, a tailored selection of fresh produce and other perishables, followed by a "Power Wall" displaying some of our most compelling offerings.
+Added: We continue to operate and integrate acquired United Grocery Outlet stores to our standards as we evaluate the timing to transition such stores to our IO model.
Stores are assorted and merchandised uniquely by IOs providing a "WOW!" treasure hunt shopping experience.
A majority of the assortment in each Grocery Outlet store is selected by IOs based on local preference and shopping history while the remaining assortment is delivered to stores to support marketing circulars and manage "sell-by" dates.
−Removed: We have several customized systems and tools in place, including our ordering system that allows IOs to see our real-time inventory and provides ordering suggestions based on local store characteristics.
+Added: We have several customized systems and tools in place, including our ordering system that is designed to provide IOs visibility to our current inventory and ordering suggestions based on local store characteristics.
We continue to implement operational initiatives to support IOs in enhancing the customer experience.
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We also regularly deploy updated fixtures, signage and enhanced in-store marketing to further improve the shopping experience, which we believe results in higher customer traffic and average basket sizes.
−Removed: We believe that new store growth remains our biggest driver of long-term stockholder value.
−Removed: We further believe the success of our stores across a broad range of geographies, population densities and demographic groups creates a significant opportunity to profitably increase our store count.
−Removed: In fiscal 2023 we opened 28 new stores in California (10), Maryland (5), Pennsylvania (4), Washington (2), Nevada (2), New Jersey (2), Oregon (1), Idaho (1) and first store in Ohio (1).
−Removed: We deploy a store model that generates robust store-level financial results, strong cash flow and attractive return.
−Removed: We have a dedicated real estate team that utilizes a rigorous site selection process in order to source new store locations that generate strong overall returns and generally targets new stores of between 15,000 and 20,000 total square feet with an average of 4,000 square feet of non-selling space.
−Removed: We believe our white space remains vast with the potential to operate approximately 4,800 stores across the United States.
−Removed: Our new store growth efforts for fiscal 2024 and beyond remain focused on organic growth together with new real estate opportunities (such as our pending acquisition of United Grocery Outlet) that align with our long-term geographic expansion and store growth strategies.
+Added: We believe that strategic new store growth remains a significant and critical driver of long-term stockholder value.
+Added: Additionally, we further believe our white space remains vast with the potential to operate over 4,000 stores across the United States, demonstrated by the success of our stores across a broad range of geographies, population densities and demographic groups.
+Added: Our new store growth efforts remain focused on organic growth that align with our long-term geographic expansion and store growth strategies.
Complementary growth opportunities include expanding strategic relationships with large property owners, evaluating opportunistic real estate lists, and exploring strategic regional acquisitions.
−Removed: We believe organic growth combined with these complementary opportunities will enable us to grow our store base on average approximately 10% per year.
+Added: We deploy a store model that is designed to generate robust store-level financial results, strong cash flow and attractive return.
+Added: We have a dedicated real estate team that utilizes a rigorous site selection process in order to source new store locations that generate strong overall returns and generally targets new stores of between 15,000 and 20,000 total square feet with an average of 4,000 square feet of non-selling space.
+Added: In fiscal 2024 in addition to the United Grocery Outlet stores we acquired, we opened 27 new stores in California (8), Maryland (4), Pennsylvania (4), New Jersey (3), Idaho (2), Ohio (2), Washington (2), Delaware (1) and Tennessee (1), and closed two stores during the year.
+Added: On April 1, 2024, we acquired 40 United Grocery Outlet stores in six adjacent states we did not operate in as of such date, including Tennessee (24), North Carolina (9), Georgia (4), Alabama (1), Kentucky (1) and Virginia (1).
Our ability to consistently deliver "WOW!" deals that generate customer excitement is our strongest marketing tool.
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We reinforce these efforts with in-store price and item signage as well as outdoor marketing via billboards and truck wraps.
−Removed: In fiscal 2023, we launched a mobile personalization app in our Washington, Oregon, Pennsylvania, Idaho, Maryland, New Jersey and Ohio stores and we plan to launch the app to our stores in California and Nevada by the end of the first quarter of fiscal 2024.
+Added: In fiscal 2023, we launched a mobile personalization app, which was fully deployed across all Grocery Outlet stores in fiscal 2024.
The app allows customers to track their savings and provides new, trending and top selling items as well as curated product recommendations based on user preferences.
−Removed: Further, the app provides us with critical information to make our marketing efforts more effective and efficient.
+Added: Further, the app provides us with critical data analytics to make our marketing efforts more effective and efficient.
IOs develop and fund their local marketing plan to drive customer engagement.
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They may also compete with us for products and locations.
+Added: During fiscal 2024, we observed an increase in promotional and pricing activities from key competitors, which led to our increased efforts to actively negotiate costs and adjust prices to sharpen our value proposition.
We also face internally generated competition when we open new stores in markets we already serve.
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Many competitors and a number of pure online retailers are attempting to attract customers by offering various forms of e-commerce.
−Removed: We have embraced online and digital marketing, including launching a mobile personalization app during fiscal 2023, which we plan to continue to expand in fiscal 2024, and rolling out online shopping to our stores through partnerships with online grocery delivery companies in recent years.
−Removed: Beyond competition for consumers, we compete against a fragmented landscape of opportunistic purchasers, including retailers (e.g., Big Lots and 99 Cents Only) and wholesalers to acquire excess merchandise for sale in our stores.
+Added: We have entered into partnerships with these third party grocery delivery companies to provide online shopping at our stores and we have embraced online and digital marketing, including with our mobile personalization app.
+Added: Beyond competition for consumers, we compete against a fragmented landscape of opportunistic purchasers, including retailers and wholesalers to acquire excess merchandise for sale in our stores.
Our established relationships with most of our suppliers along with our distribution scale, buying power, financial credibility and responsiveness often makes us the first call for available deals.
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We selected and developed these technologies to provide the flexibility and functionality to support our unique buying and selling model as well as to identify and respond to merchandising and operating trends in our business.
−Removed: The ongoing modernization, enhancement and maintenance of our information systems have allowed us to support the growth in our business and store base.
−Removed: We have modernized and added several systems that provide us additional functionality and scalability in order to better support operational decision-making, including enhanced point of sale, warehouse management, human resource planning, business intelligence, vendor tracking and lead management, store communications, real estate lease management and financial planning and analysis systems.
+Added: The modernization, enhancement and maintenance of our information systems have allowed us to support the growth in our business and store base.
+Added: We have added several systems that provide us additional functionality and scalability in order to better support operational decision-making, including enhanced point of sale, warehouse management, human resource planning, business intelligence, vendor tracking and lead management, store communications, real estate lease management and financial planning and analysis systems.
We modify, update and replace our systems and infrastructure from time to time, including by adding new hardware, software and applications;
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In addition, we have a customized enterprise resource planning system, components of which have been replaced over the past several years, including our financial ledger, inventory management platform and product data warehouse system, which were replaced in late August 2023.
−Removed: As previously disclosed, t he implementation of these system upgrades resulted in ordering and inventory disruptions, which impacted our results of operations during the remainder of fiscal 2023.
−Removed: We also will continue to identify and implement productivity improvements through both operational initiatives and system enhancements, such as category assortment optimization, improved inventory management tools and greater purchasing specialization.
−Removed: We also have built a series of tools that empower IOs to make intelligent decisions to grow their business from improving product ordering, reducing shrink, and gaining intelligence into their store performance and profitability.
−Removed: We believe these investments have resulted in valuable business insights and operational improvements.
+Added: As previously disclosed, t he implementation of these system upgrades resulted in significant disruption to our business operations, including ordering and inventory disruptions, as well as payment processing, which adversely impacted our results of operations for the fiscal months of September through December of 2023 as well as during fiscal 2024.
+Added: In connection with addressing these issues, we have invested and are continuing to invest in enhancements and additional resources to improve visibility into our operating data to function at the speed and efficiency necessary for optimal execution of our business.
+Added: We also continue to identify and implement productivity improvements through both operational initiatives and system enhancements, such as category assortment optimization, improved inventory management tools, greater purchasing specialization and back-office processing efficiencies.
+Added: Further, we have built a series of tools that empower IOs to make intelligent decisions to grow their business from improving product ordering, reducing shrink, and gaining intelligence into their store performance and profitability.
+Added: We believe these investments, once optimized, will result in valuable business insights and operational improvements.
Trademarks and Other Intellectual Property
−Removed: We own federally registered trademarks related to our brand, including "GROCERY OUTLET BARGAIN MARKET", "WOW!", "NOSH" and "BARGAIN BLISS" In addition, we maintain trademarks for the images of certain logos that we use, including the "GROCERY OUTLET BARGAIN MARKET" logo, the "NOSH" logo and the "WOW!" logo.
+Added: We own federally registered trademarks related to our Grocery Outlet Bargain Market brand, including "GROCERY OUTLET BARGAIN MARKET," "WOW!," "NOSH" and "BARGAIN BLISS." In addition, we maintain trademarks for the images of certain logos that we use, including the "GROCERY OUTLET BARGAIN MARKET" logo, the "NOSH" logo and the "WOW!" logo.
We are also in the process of pursuing several other trademarks to further identify our services.
We have disclaimed the terms "GROCERY OUTLET" and "MARKET" with respect to our "GROCERY OUTLET BARGAIN MARKET" trademarks, among other disclaimed terms with respect to our registered trademarks and trademark applications.
+Added: We also own federally registered trademarks utilized by United Grocery Outlet, including “1st Stop For Extreme Value,” “Shop G.O.
+Added: 1st,” and “GO GROCERY OUTLET.”
Our trademark registrations have various expiration dates;
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We also own several domain names, including www.groceryoutlet.com and www.ownagroceryoutlet.com, and registered and unregistered copyrights in our website content.
−Removed: Our Operator Agreement grants the IOs a limited, non-exclusive license to use our trademarks solely in connection with the operation and promotion of their store and not in connection with other activities.
+Added: Our Operator Agreement grants the IOs a limited, non-exclusive license to use our Grocery Outlet Bargain Market brand trademarks solely in connection with the operation and promotion of their store and not in connection with other activities.
To maintain quality of use of our trademarks, we exercise actual control over the IO's use of our trademarks and IOs are not permitted to sublicense our trademarks to others.
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Department of Agriculture (the "USDA") the Consumer Product Safety Commission and the Environmental Protection Agency.
−Removed: We and the IOs are also subject to various federal, state and local laws and regulations, including those governing labor and employment, including minimum wage requirements and employee safety, advertising, privacy, safety and environmental protection and consumer protection regulations, including those that regulate retailers and/or govern product standards, the importation, transportation, promotion and sale of merchandise, packaging material safety and recycling and the operation of stores and warehouse facilities.
+Added: We and the IOs are also subject to various federal, state and local laws and regulations, including those governing labor and employment, including minimum wage requirements and employee safety, advertising, privacy, safety and environmental protection and consumer protection regulations, including those that regulate retailers and/or govern product standards, the importation, transportation, promotion and sale of merchandise, packaging material safety and recycling, waste reduction and the operation of stores and warehouse facilities.
In addition, we and the IOs must comply with provisions regulating health and sanitation standards, food labeling, non-food labeling and licensing for the sale of food and alcoholic beverages.
We actively monitor changes in these laws.
−Removed: In addition, we and the IOs are subject to environmental laws, including but not limited to hazardous waste laws, regulations related to refrigeration and stormwater, pursuant to which we and/or the IOs could be strictly and jointly and severally liable, regardless of our knowledge or responsibility.
+Added: In addition, we and the IOs are subject to environmental laws, including but not limited to hazardous waste laws, and regulations related to refrigeration and stormwater, pursuant to which we and/or the IOs could be strictly and jointly and severally liable, regardless of our knowledge or responsibility.
Food and Dietary Supplements — The FDA regulates the safety of certain food and food ingredients, as well as dietary supplements under the federal Food, Drug, and Cosmetic Act (the "FDCA").
Similarly, the USDA's Food Safety Inspection Service ensures that the country's commercial supply of meat, poultry, catfish and certain egg products is safe, wholesome and correctly labeled and packaged.
−Removed: The Food Safety Modernization Act (the "FSMA") amended the FDCA in 2011 and expanded the FDA's regulatory oversight of all supply chain participants.
+Added: For our stores that process, handle and package meat and meat products, we are subject to regulation, registration and regular inspections under the USDA Food Safety and Inspection Service.
+Added: The Food Safety Modernization Act amended the FDCA in 2011 and expanded the FDA's regulatory oversight of all supply chain participants.
Most of the FDA's promulgated regulations are now in effect and mandate that risk-based preventive controls be observed by the majority of food producers.
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In general, our purchase orders require that suppliers be compliant and represent and warrant to compliance with laws and require indemnification and/or insurance from our suppliers and manufacturers.
−Removed: However, even with adequate insurance and indemnification, any claims of non-compliance could significantly damage our reputation and consumer confidence in products we sell.
+Added: However, even with adequate insurance and indemnification, any claims of non-compliance could significantly damage our reputation and consumer confidence in the products we sell.
In addition, the failure of such products to comply with applicable regulatory and legislative requirements could prevent us from marketing the products or require us to recall or remove such products from our stores.
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Our policies and our supplier compliance agreements mandate compliance with applicable law, including these laws and regulations.
+Added: Our business is impacted by mild seasonality, as our average weekly sales per store fluctuate throughout the year, with sales typically higher during major U.S.
+Added: holidays or events.
Human Capital Management
+Added: Our mission is to Touch Lives for the Better .
+Added: To do this, we work together to foster a culture grounded in talented and passionate people who live our values:
+Added: entrepreneurship, integrity, achievement, family, service to others, diversity and fun.
+Added: Our values translate into our human capital offerings to recruit, engage, develop, reward and retain employees who believe in our mission and emulate our values.
Employees — Our people are at the heart of who we are and what we do.
They are key to achieving our business goals and growth strategy.
+Added: Following the acquisition of United Grocery Outlet in fiscal 2024, our employee population doubled due to the UGO stores being company-operated.
As of December 28, 2024, we had 2,307 employees, 1,692 of whom were full-time and 615 of whom were part-time.
−Removed: As of December 30, 2023, 516 of our employees were based at our corporate headquarters in Emeryville, California, and our Leola, Pennsylvania office, 158 of which were classified as field employees.
−Removed: As of December 30, 2023, our distribution centers employed 355 persons.
+Added: As of December 28, 2024, 632 of our employees worked in our corporate organization, 189 of which were classified as field employees, and our distribution centers employed 516 persons.
The remaining employees were employees in our Company-operated stores.
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We have experienced no material interruptions of operations due to disputes with our employees and consider our relations with our employees to be very good.
−Removed: Our mission is to Touch Lives for the Better .
−Removed: To do this, we work together to foster a culture grounded in talented and passionate people who live our values:
−Removed: entrepreneurship, integrity, achievement, family, service to others, diversity and fun.
−Removed: Our values translate into our human capital offerings to recruit, engage, develop, reward and retain employees who believe in our mission and emulate our values.
+Added: In the first quarter of fiscal 2025, we implemented a reduction to our workforce by approximately 40 full-time employees.
+Added: See “ Management's Discussion and Analysis of Financial Condition and Results of Operations – Recent Trends and Developments – Restructuring Plan” for additional information.
Employee Development —We seek to grow leaders at every level of our organization by creating a culture of mentoring and coaching.
−Removed: As part of our succession planning, we prioritize growing talent internally within our organization and invest resources to develop our employee's skill sets and career path.
−Removed: As an example, our current Chief Executive Officer, Robert J.
−Removed: Sheedy, Jr., joined Grocery Outlet in 2012 as our Vice President of Strategy and thereafter was promoted three times before becoming President and Chief Executive Officer in January 2023.
−Removed: Some of our offerings during 2023 (offered virtually and, in some cases, in person) included:
+Added: As part of our succession planning, we prioritize growing talent internally within our organization and invest resources to develop our employees' skill sets and career paths.
+Added: Some of our offerings to our Grocery Outlet employees during 2024 (offered virtually and, in some cases, in person) included:
• Certification program opportunities, including offerings in personal growth and professional development;
• Lunch and learn events, featuring a wide variety of personal development topics and industry speakers;
−Removed: • Individual coaching for leadership development, and other leadership training on an ad hoc basis
+Added: • Individual coaching for leadership development, and other leadership training for supervisors through Vice Presidents;
+Added: • Virtual learning platform, including leadership development courses and specific hard skills training on project management and Microsoft Excel.
We encourage internal promotions and hiring for open positions.
2 unchanged sentences
We have robust safety programs in place to prevent workplace injury and illness.
−Removed: In recent years, we have refined and adopted additional safety training initiatives in a variety of areas, including among others, hazard
−Removed: communications, fire prevention, emergency action playbooks, blood borne pathogens, health illness avoidance, and active shooter.
+Added: In recent years, we have refined and adopted additional safety training initiatives in a variety of areas, including among others, hazard communications, fire prevention, emergency action playbooks, blood borne pathogens, health illness avoidance, and active shooter.
These refinements and initiatives are ongoing.
2 unchanged sentences
Employee Compensation and Benefits —We provide compensation and comprehensive benefits designed to recruit, reward and retain the talent necessary to advance our mission, meet our business goals and execute our long-term growth strategy.
−Removed: Our compensation components vary by employee level and include cash based compensation, cash bonuses, equity awards and a profit-sharing program.
+Added: Our compensation components vary by employee level and can include cash based compensation, cash bonuses, equity awards and a profit-sharing program.
Additionally, we provide generous and highly competitive health and welfare benefits programs.
−Removed: Equity, Diversity and Inclusion —We report annually on employment data, including ethnicity, in line with Equal Opportunity Commission ("EEOC") guidelines and we believe that a diverse and inclusive team is critical to our long-term business success.
−Removed: Workforce Demographics
−Removed: Gender Breakdown
−Removed: All Employees
−Removed: Director & above roles
−Removed: Racial & Ethnic Breakdown (1)
−Removed: All Employees
−Removed: Hispanic/Latino, Asian, Black/African America, Native Hawaiian/Other Pacific Islander, Multiracial, or American Indian/Alaskan Native 64 %
−Removed: Director & above roles
−Removed: Hispanic/Latino, Asian, Black/African America, Native Hawaiian/Other Pacific Islander, Multiracial, or American Indian/Alaskan Native 35 %
−Removed: _______________________
−Removed: (1) Racial and Ethnic data excludes employees who chose not to disclose or left the field blank.
−Removed: In fiscal 2023 , of the 79 promoted corporate and field employees, 49% were female and 46% were racially and ethnically diverse, excluding employees who chose not to disclose or left the field blank.
−Removed: We have several employee resource groups that enhance our inclusive and diverse culture, including our overarching Equity, Diversity and Inclusion Council, our Black Partnership Network, and our WOW!
−Removed: (Winning with Outstanding Women) Network.
−Removed: We also provide regular training on diversity and inclusion topics, including those relating to current events in our communities.
−Removed: We will continue to focus on genuine equal opportunity for all in hiring, retention and advancement, and cultivating an inclusive and diverse corporate culture through continued education, employee resource groups and education and development opportunities across our organization.
+Added: Equity, Diversity and Inclusion —We believe that a diverse and inclusive team is important to our long-term business success.
+Added: As part of our commitment to transparency, we are committed to disclosing our workforce diversity data (by gender, race and ethnicity) that we include in our consolidated EEO-1 report filed with the U.S.
+Added: Equal Employment Opportunity Commission, beginning with fiscal 2024 data to be included in our Impact Report that will be published in 2025.
+Added: We focus on genuine equal opportunity for all in hiring, retention and advancement, and cultivating an inclusive, merit-based and diverse corporate culture through continued education and development opportunities across our organization.
We strive to nurture and uphold an inclusive and diverse environment, free from discrimination of any kind, including sexual or other discriminatory/harassing behavior.
We do this by setting an appropriate tone at the top with an open-door policy, having robust policies/procedures in our Code of Ethics and Whistleblower Policy as well as maintaining an internal audit function - all of which support compliance with regulations and ethical behavior.
−Removed: Acquisition of United Grocery Outlet
−Removed: On February 14, 2024, Grocery Outlet Inc., our wholly owned subsidiary, entered into a stock purchase agreement with BBGO Acquisition, Inc., a Delaware corporation ("Holdings"), specified parties therein that beneficially own Holdings (the "Sellers"), and Southvest Fund VII, L.P., a Delaware limited partnership (the "Sellers' Representative", and together with the Sellers, the "Seller Parties" and, together with Holdings and Grocery Outlet, the "Parties") to acquire all of the issued and outstanding capital stock of Holdings for approximately $62.0 million in cash, subject to customary purchase price adjustments (the "Transaction").
−Removed: We expect to finance the Transaction with available cash.
−Removed: Holdings is the owner of all of the issued and outstanding capital stock of The Bargain Barn, Inc., a Tennessee corporation doing business as United Grocery Outlet ("United Grocery Outlet").
−Removed: United Grocery Outlet operates 40 discount grocery stores across six adjacent states we do not operate in currently (Tennessee, North Carolina, Georgia, Alabama, Kentucky and Virginia) and a company-operated distribution center.
−Removed: With an opportunistic buying model, similar company values and adjacent geographic footprint, we believe United Grocery Outlet will be a strong strategic fit with our business.
−Removed: The transaction is expected to close early in the second quarter of fiscal 2024 and is subject to customary closing conditions.
−Removed: Unless otherwise stated, none of the disclosures in this Report reflect our pending acquisition of United Grocery Outlet.
Website Disclosure
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The contents of our website and information accessible through our website is not, however, incorporated by reference or a part of this report.
−Removed: Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports, and the Proxy Statement for our Annual Meeting of Stockholders are available, free of charge, on our website as soon as practicable after the we file the reports with the SEC.
−Removed: Information about our Executive Officers
−Removed: The following table sets forth information about our executive officers as of the date of this filing:
−Removed: Name Age Position
−Removed: Sheedy, Jr 49 President and Chief Executive Officer
−Removed: Bracher 51 EVP, Chief Financial Officer
−Removed: Ramesh Chikkala 59 EVP, Chief Operations Officer
−Removed: Bortner 61 EVP, Chief Human Resources Officer
−Removed: Burke 56 EVP, Chief Stores Officer
−Removed: Thompson 51 EVP, General Counsel and Secretary
−Removed: Wilson 59 EVP, Chief Purchasing Officer
−Removed: Calvin Chung 60 SVP, Chief Store Development Officer
−Removed: Set forth below is a brief description of the business experience of our executive officers.
−Removed: All of our officers serve at the discretion of our Board of Directors.
−Removed: has served as our President, Chief Executive Officer and as a director since January 2023.
−Removed: Previously, Mr.
−Removed: Sheedy served as our President from January 2019 to December 2022, as our Chief Merchandise, Marketing & Strategy Officer from April 2017 to December 2018, our Chief Merchandise & Strategy Officer from March 2014 to April 2017 and our Vice President, Strategy from April 2012 to February 2014.
−Removed: Before joining us, Mr.
−Removed: Sheedy served in various roles at Staples Inc., an office supply company, from 2005 to 2012, most recently as its Vice President, Strategy.
−Removed: Bracher has served as our EVP, Chief Financial Officer since August 2012.
−Removed: Before joining us, Mr.
−Removed: Bracher served in various roles at Bare Escentuals, Inc., a mineral cosmetics company, from 2005 to 2012, most recently as Chief Financial Officer.
−Removed: Bracher began his career in the Investment Banking Division of Goldman, Sachs & Co.
−Removed: As previously reported, on December 8, 2023, Mr.
−Removed: Bracher submitted his resignation, effective March 1, 2024, to pursue another opportunity, and he will serve thereafter as a consultant to the Company to assist in the transition of his role.
−Removed: Ramesh Chikkala has served as our EVP, Chief Operations Officer since January 2024.
−Removed: Before joining us, Mr.
−Removed: Chikkala served as a senior advisor to the operations, supply chain, and technology practices at A.T.
−Removed: Kearney, Inc., a global
−Removed: management consulting firm, from August 2019 to January 2024.
−Removed: From July 2006 to July 2019, Mr.
−Removed: Chikkala held several roles of increasing responsibility at Walmart Inc., a global omnichannel retailer, including as Senior Vice President, Global Supply Chain (Omnichannel) and Food Manufacturing (April 2013 to July 2019), Senior Vice President, Information Technology (January 2009 to March 2013), and Vice President, Information Technology (July 2006 to December 2008).
−Removed: In addition, he also held senior operations and supply chain roles at retailers including Family Dollar Stores, Inc.
−Removed: (2001 to 2006), Gap, Inc.
−Removed: (1997 to 2001) and Food Lion, LLC (1995 to 1996).
−Removed: Bortner has served as our EVP, Chief Human Resources Officer since March 2020.
−Removed: Before joining us, Ms.
−Removed: Bortner served as Chief Human Resources Officer at Maxar Technologies, Inc., a space technology company, from August 2016 to October 2019 and as Chief Human Resources Officer at Catalina, an advertising and marketing company, from August 2012 to June 2016.
−Removed: Burke has served as our EVP, Chief Stores Officer since January 2022.
−Removed: Burke previously served as our EVP, Chief Administrative Officer, General Counsel and Secretary from January 2019 to December 2021 and our General Counsel and Secretary from June 2015 to December 2018.
−Removed: Before joining us, Ms.
−Removed: Burke served in various management positions at CRC Health Group, Inc., a provider of specialized behavioral health services, most recently as Senior Vice President of Legal, HR and Risk from April 2010 to February 2015.
−Removed: Thompson has served as our EVP, General Counsel and Secretary since February 2024.
−Removed: Previously, he served as our SVP, General Counsel and Secretary from July 2022 until February 2024.
−Removed: Before joining us, Mr.
−Removed: Thompson served in various roles at Big 5 Sporting Goods, a sporting goods retailer, from 2002 to 2022, most recently as Executive Vice President, General Counsel and Secretary.
−Removed: Wilson has served as our EVP, Chief Purchasing Officer since January 2023.
−Removed: Previously, Mr.
−Removed: Wilson served as SVP, Chief Purchasing Officer from September 2020 to December 2022, as our Senior Vice President of Purchasing from February 2018 to August 2020 and as our Vice President of Purchasing from July 2006 to January 2018.
−Removed: Prior to being appointed Vice President of Purchasing, Mr.
−Removed: Wilson served in various positions of increasing responsibility with us since 1994.
−Removed: Calvin Chung has served as our SVP, Chief Store Development Officer since March 2023.
−Removed: Chung previously served as SVP & Chief Development Officer of Office Depot, a provider of retail consumer and small business products and services, from August 2018 to March 2023, as Senior Vice President, Global Real Estate at Levi Strauss & Co., an international apparel company, from October 2016 to August 2018, and as Vice President, Real Estate Development—Asia at Walmart from February 2013 to October 2016.
−Removed: Prior to Walmart he served as Director of Property Development for Target Corporation.
−Removed: The Board of Directors intends to appoint Lindsay E.
−Removed: Gray as Interim Chief Financial Officer, effective March 1, 2024, and she will continue to serve as Senior Vice President, Accounting.
−Removed: Gray will be principal financial officer during her interim service and will continue to be the principal accounting officer.
−Removed: Gray, age 39, has been our Senior Vice President, Accounting since January 2023.
−Removed: She also served as the Company's Vice President, Corporate Controller from August 2016 to December 2022.
−Removed: Previously, Ms.
−Removed: Gray worked at Beverages & More, Inc.
−Removed: (dba BevMo!), a U.S.
−Removed: specialty beverage retailer, including as Controller from August 2015 to August 2016 and as Director of Financial Reporting from November 2010 to August 2015.
−Removed: In addition, Ms.
−Removed: Gray served as an Audit Senior at Deloitte and Touche LLP from September 2006 to July 2010.
+Added: Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports, and the Proxy Statement for our Annual Meeting of Stockholders are available, free of charge, on our website as soon as practicable after we file the reports with the SEC.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.