−Removed: 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.
−Removed: 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.
+Added: Grocery Outlet is a growth-oriented extreme value retailer of quality, name-brand consumables and fresh products sold primarily through a network of independently operated stores.
+Added: As of January 3, 2026, we had 570 stores in California, Washington, Oregon, Pennsylvania, Tennessee, Idaho, Nevada, Maryland, Ohio, New Jersey, North Carolina, Georgia, Alabama, Delaware, Kentucky and Virginia.
Our headquarters is in Emeryville, California.
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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.
−Removed: 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.
+Added: This differentiated approach has historically driven positive comparable store sales growth.
Our differentiated model for buying and selling delivers a "WOW!" shopping experience, which generates customer excitement, inspires loyalty and supports profitable sales growth:
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• How we sell:
−Removed: 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.
+Added: Our Grocery Outlet stores are primarily 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.
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We believe that our sustained focus on delivering ever-changing "WOW!" deals within a fun, treasure hunt shopping environment has generated strong customer loyalty and brand affinity.
−Removed: 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.
+Added: We believe that our broad customer appeal supports new store growth opportunities, and we plan to continue to expand our reach to additional customers and geographies.
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.
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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.
−Removed: See NOTE 15—Business Combination to our Consolidated Financial Statements for additional information.
−Removed: 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: See Note 15 to the consolidated financial statements for additional information.
Throughout this report, the discussion of our business, stores, operations and strategies generally refers to our IO-operated stores.
−Removed: As of December 28, 2024, 42 stores, including the 40 acquired United Grocery Outlet stores, were Company-operated stores.
−Removed: 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.
+Added: As of January 3, 2026, 41 stores, including 39 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 was not material to our operations and our consolidated financial statements in fiscal 2025 and 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.
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• Evolve our business.
−Removed: We are focused on advancing our model through expanding our assortment and digitizing our business with more integrated end-to-end technology.
+Added: We are focused on advancing our model through optimizing our assortment and digitizing our business with more integrated end-to-end technology.
We also continue to implement operational initiatives to support IOs in enhancing the customer experience.
−Removed: • Expand our footprint.
−Removed: We believe that strategic new store growth remains a significant and critical driver of long-term stockholder value.
+Added: • Optimize and expand our footprint.
+Added: We believe that strategic new store growth remains a significant driver of long-term stockholder value.
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.
−Removed: We intend to continue to expand our reach to additional customers and geographies across the United States.
−Removed: 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.
−Removed: 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.
−Removed: 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”).
−Removed: See “Management's Discussion and Analysis of Financial Condition and Results of Operations – Recent Trends and Developments – Restructuring Plan” for additional information.
+Added: While we continue to believe in our long-term growth potential, we initiated a number of actions beginning in late fiscal 2024, including the cancellation of store leases for unopened stores and closure of underperforming store locations, intended to simplify our near-term growth strategy, build a stronger foundation from which to scale in the future, and drive sustainable and disciplined growth, profitability and cash flow generation.
+Added: See “Management's Discussion and Analysis of Financial Condition and Results of Operations – Recent Trends and Developments – Optimization Plan and Restructuring Plan” for additional information.
+Added: Further, in the near term, we plan to expand with a more clustered model in new markets to improve supply chain efficiency and marketing leverage that reflects our more disciplined approach.
Products and Pricing
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Our product offering includes a constant rotation of opportunistic products, complemented by an assortment of competitively priced everyday staples across grocery, produce, refrigerated and frozen foods, beer and wine, fresh meat and seafood, general merchandise and health and beauty care.
−Removed: We have continued to expand our product assortment to meet customer needs, including a wide selection of NOSH, fresh, ethnic and local products.
−Removed: 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.
+Added: We have continued to evolve our product assortment to meet customer needs, including a wide selection of NOSH, fresh, ethnic and local products.
+Added: We introduced our private label products in stores beginning in the third quarter of fiscal 2024, with approximately 485 private-label SKUs across various grocery, deli, frozen, general merchandise and wine categories introduced as of January 3, 2026.
+Added: Our private label products are intended to foster customer loyalty through both everyday commodity staples and unique items exclusive to us.
A typical Grocery Outlet basket is priced approximately 40% lower than conventional grocers and approximately 20% lower than discount retailers.
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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 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.
+Added: We believe our introduction of our private label products in stores will continue to 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, 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: Our systems, including our new store portal, are designed to provide IOs visibility to our current inventory, and the launch of our upgraded real-time order guide in fiscal 2025 has given IOs the capability to sharpen merchandising in their stores.
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.
−Removed: 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: We implemented system upgrades in August 2023, and as a result, we and our IOs experienced significant disruptions to our ordering, inventory planning and management and payment processing during the remainder of fiscal 2023 through fiscal 2024 and into fiscal 2025.
+Added: We have since implemented multiple capabilities and improved the data visibility to help us manage the business and we continue to work to further improve visibility into additional operating data, and to increase the speed and efficiency of the tools that we and our IOs use to manage the business.
See “Business Technology” for additional information.
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Deliveries to our stores occur from our distribution centers or directly from our suppliers.
−Removed: 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: As of January 3, 2026 , 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).
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.
−Removed: We are shifting our planned investments in our distribution infrastructure in fiscal 2025 and fiscal 2026 away from highly capital-intensive projects.
−Removed: We will instead invest in lower cost distribution centers for dry goods to enhance capacity and improve inventory management and overall execution.
−Removed: See “Management's Discussion and Analysis of Financial Condition and Results of Operations – Recent Trends and Developments – Restructuring Plan” for additional information.
+Added: In connection with the Restructuring Plan, we have shifted our planned investments in our distribution infrastructure in fiscal 2025 and fiscal 2026 away from highly capital-intensive projects.
+Added: We have instead, and plan to continue to, invest in lower cost distribution centers to enhance capacity and improve inventory management and overall execution.
+Added: During the first quarter of fiscal 2025, we cancelled certain warehouse projects in connection with such strategy.
+Added: See “Management's Discussion and Analysis of Financial Condition and Results of Operations – Recent Trends and Developments – Optimization Plan and Restructuring Plan” for additional information.
Independent Operators
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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 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.
−Removed: 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.
+Added: As of January 3, 2026, 529 of our 570 stores were operated by IOs, with the remaining 41 stores currently operated by us.
+Added: 39 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.
+Added: While historically IOs have operated a store from its opening, in fiscal 2026, we plan to operate certain newly opened stores as Company-operated stores for an uncertain time period with the intent to eventually transition the operation for such stores to an IO.
+Added: We believe this should help to ensure the success of these store openings, and if that proves to be the case, this approach could be applied in more markets as we continue to grow.
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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The success of this licensing arrangement depends upon mutual commitments by us and the IO to cooperate with each other and engage in practices that protect our brand standards and the reputation of our brand and enhance the sales, business and profit potential of the IO's store.
−Removed: The Operator Agreement provides that either the IO or we may terminate the Operator Agreement for any reason on 75 days' written notice, and that we may terminate the Operator Agreement immediately for cause.
+Added: The Operator Agreement provides that either the IO or we may terminate the Operator Agreement for any reason on no less than 75 days' written notice, and that we may terminate the Operator Agreement immediately for cause.
IOs are responsible for operational decision-making for their store, including hiring, training and employing their own workers as well as ordering and merchandising products.
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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.
−Removed: IOs are expected to engage in local marketing efforts to promote their store and enhance the reputation and goodwill of the Grocery Outlet brand.
+Added: IOs are expected to engage in local marketing efforts to promote their store
+Added: and enhance the reputation and goodwill of the Grocery Outlet brand.
To protect our brand and reputation, the Operator Agreement requires IOs to adhere to brand standards, including cleanliness, customer service, store appearance, conducting their business in compliance with all laws and observing requirements for storing, handling and selling merchandise.
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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 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.
−Removed: 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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IOs are responsible for expenses required for business operations, including all labor costs, utilities, credit card processing fees, supplies, taxes (i.e., withholding, contributions and payroll taxes and income taxes on commissions paid to them), fines, levies and other expenses attributable to their operations.
−Removed: In a typical year, we receive and filter thousands of leads for prospective new IOs in pursuit of smart and entrepreneurially minded retail leaders to support our continued growth.
+Added: We regularly receive and filter many leads for prospective new IOs in pursuit of smart and entrepreneurially minded retail leaders to support the long-term growth strategy of the business.
After a robust screening and interview process, we select the top candidates to enter a rigorous Aspiring Operator in Training ("AOT") program with the goal of potentially becoming an IO.
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Based on the strength of that business plan, including an AOT's familiarity with the local market, we ultimately select an IO as new store opportunities open and facilitate the transition.
−Removed: Our Stores and Expansion Opportunities
−Removed: As of December 28, 2024, our 533 total stores averaged approximately 14,000 square feet on the sales floor.
−Removed: We lease substantially all of our store locations, with initial lease terms of generally ten years and options to renew for two or three successive five-year periods.
+Added: Our Store Operations
+Added: As of January 3, 2026, our 570 total stores averaged approximately 13,600 square feet on the sales floor.
+Added: We lease substantially all of our store locations, with initial lease terms of generally ten to fifteen years and options to renew for three or four successive five-year periods.
Our stores are convenient, neatly organized, well maintained and easy to navigate with wide aisles and clear signage to guide the customer through our various departments such as produce, beer and wine and fresh meat and seafood.
−Removed: The stores require neither membership fees nor bulk purchases for customers to save money and have a high level of customer service.
−Removed: 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.
−Removed: 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.
+Added: The stores offer customers the ability to save money and have a high level of customer service without membership fees or bulk purchase requirements.
+Added: In fiscal 2025, we initiated improvements to our store layout and in-store value messaging for certain store locations, including logically grouping product categories throughout the store with fresh departments merchandised together, relocating produce to the front of the store layout and communicating our core assortment and unique opportunistic offerings through updated signage.
+Added: These improvements, which we intend to roll out at a significant number of additional stores in fiscal 2026 and thereafter, are designed to create a more inviting and more intuitive customer shopping experience.
Stores are assorted and merchandised uniquely by IOs providing a "WOW!" treasure hunt shopping experience.
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We seek to continuously improve our inventory planning tools to help IOs make better local assortment decisions while reducing out-of-stock items and losses related to product markdowns, throwaways and theft ("shrink").
+Added: We have improved the data visibility to help us and the IOs manage and forecast the business and we continue to work to further improve visibility into additional operating data, and to increase the speed and efficiency of the tools that we and our IOs use to manage the business.
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 strategic new store growth remains a significant and critical driver of long-term stockholder value.
−Removed: 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.
−Removed: Our new store growth efforts remain focused on organic growth that align with our long-term geographic expansion and store growth strategies.
+Added: Store Expansion Opportunities
+Added: We believe that strategic new store growth remains a significant driver of long-term stockholder value.
+Added: Additionally, while we recently initiated an Optimization Plan that includes closing certain underperforming stores (see “Management's Discussion and Analysis of Financial Condition and Results of Operations – Recent Trends and Developments – Optimization Plan and Restructuring Plan"), we continue to believe our white space remains vast with the potential to grow across the United States, demonstrated by the success of most 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, while we plan to expand with a more clustered model in new markets to improve supply chain efficiency and marketing leverage that reflects our more disciplined approach.
+Added: We are also making adjustments to how we go to market, including piloting new approaches to store openings and underwriting to stricter standards.
Complementary growth opportunities include expanding strategic relationships with large property owners, evaluating opportunistic real estate lists, and exploring strategic regional acquisitions.
We deploy a store model that is designed to generate 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: 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.
−Removed: 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).
+Added: We maintain a dedicated real estate team that employs a data-driven site selection process to source new store locations designed to generate attractive returns.
+Added: Our new stores generally range from approximately 14,000 to 18,000 total square feet, including an average of approximately 4,000 square feet of non-selling space.
+Added: In fiscal 2025 and fiscal 2024, we opened a total of 69 new stores in the following locations:
+Added: California (20), Ohio (10), Pennsylvania (8), Maryland (7), New Jersey (5), Nevada (5), Washington (5), Idaho (4), Oregon (3), Delaware (1) and Tennessee (1), and closed 5 stores during these years.
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, which was fully deployed across all Grocery Outlet stores in fiscal 2024.
−Removed: 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.
+Added: We also maintain a mobile personalization app that allows customers to track their savings and provides new, trending and top selling items as well as curated product recommendations based on user preferences.
Further, the app provides us with critical data analytics to make our marketing efforts more effective and efficient.
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They may also compete with us for products and locations.
−Removed: 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.
+Added: During the last few years we have observed an increase in promotional and pricing activities from key competitors, putting further pressure on our relative value proposition, which in turn, has resulted in 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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We compete with both conventional grocery stores and discounters by offering an ever-changing selection of name-brand products in a fun, treasure hunt shopping environment at a significant discount.
−Removed: Many competitors and a number of pure online retailers are attempting to attract customers by offering various forms of e-commerce.
−Removed: 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: Many competitors and a number of pure online retailers are attempting to attract customers by offering various forms of e-commerce, which has become an increasingly popular means of shopping for the grocery consumer.
+Added: We have entered into partnerships with 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.
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.
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Business Technology
−Removed: Our information systems provide a broad range of business process assistance and real-time data to support our purchasing and planning approach, merchandising team and strategy, multiple distribution center management, store and operational insight and financial reporting.
+Added: Our information systems provide a broad range of business technology solutions and real-time data to support our purchasing and planning approach, merchandising team and strategy, multiple distribution center management, store and operational insight and financial reporting.
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.
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and adding enhanced new functionality, such as cloud computing technologies.
−Removed: 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 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.
−Removed: 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.
−Removed: 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: In addition, we replaced our internally-developed legacy applications with a customized enterprise resource planning system, including our financial ledger, purchasing, inventory management and reporting platforms as well as integrations with our warehouse and store systems.
+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 during the remainder of fiscal 2023 through fiscal 2024 and into fiscal 2025.
+Added: We have since implemented multiple capabilities and improved the data visibility to help us manage and forecast the business and we continue to work to further improve visibility into additional operating data, and to increase the speed and efficiency of the tools that we and our IOs use to manage the business.
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.
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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.
−Removed: We are also in the process of pursuing several other trademarks to further identify our services.
+Added: We are also in the process of pursuing several other trademarks to further identify our goods and 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.
−Removed: We also own federally registered trademarks utilized by United Grocery Outlet, including “1st Stop For Extreme Value,” “Shop G.O.
−Removed: 1st,” and “GO GROCERY OUTLET.”
Our trademark registrations have various expiration dates;
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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, waste reduction and the operation of stores and warehouse facilities.
−Removed: 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.
+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, including state laws requiring retailers to report packaging data and provide more convenient recycling opportunities for consumers, waste reduction and the operation of stores and warehouse facilities.
+Added: In addition, we and the IOs must comply with provisions regulating health and sanitation standards, food labeling, non-food labeling, sales of products under federal and state programs benefitting underprivileged consumers, and licensing for the sale of food and alcoholic beverages.
We actively monitor changes in these laws.
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The FDA also exercises broad jurisdiction over the labeling and promotion of food.
−Removed: Under certain circumstances, this jurisdiction extends even to product-related claims and representations made on a company's website or similar printed or graphic media.
+Added: Under certain circumstances, this jurisdiction extends to product-related claims and representations made on a company's website or similar printed or graphic media.
All foods, including dietary supplements, must bear labeling that provides consumers with essential information with respect to standards of identity, net quantity, nutrition facts, ingredient statements and allergen disclosures.
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In addition, compliance dates on various nutrition initiatives that impacted supply chain participants, such as in relation to partially hydrogenated oils, went into effect in 2021.
−Removed: The FDA has comprehensive authority to regulate the safety, ingredients, labeling and good manufacturing practices for dietary supplements.
−Removed: The Dietary Supplement Health and Education Act (the "DSHEA") amended the FDCA in 1994 and expanded the FDA's regulatory authority over dietary supplements.
−Removed: Through DSHEA, dietary supplements became a regulated commodity while also allowing structure/function claims on products.
−Removed: However, no statement on a dietary supplement may expressly or implicitly represent that it will diagnose, cure, mitigate, treat or prevent a disease.
+Added: The FDA finalized other initiatives governing specific commonly used health claims on food labels which went into effect in 2025.
+Added: The FDA has comprehensive authority to regulate the safety, ingredients, labeling and good manufacturing practices for dietary supplements through the Dietary Supplement Health and Education Act (the "DSHEA").
+Added: Under DSHEA, dietary supplements are a regulated commodity while also allowing structure/function claims on products.
EBT Payments —Approximately 9% of our net sales in fiscal 2025 were in the form of Electronic Benefits Transfer ("EBT") payments and a substantial portion of these payments may be related to benefits associated with the Supplemental Nutritional Assistance Program ("SNAP").
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Employees — Our people are at the heart of who we are and what we do.
−Removed: They are key to achieving our business goals and growth strategy.
−Removed: Following the acquisition of United Grocery Outlet in fiscal 2024, our employee population doubled due to the UGO stores being company-operated.
−Removed: 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 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.
+Added: They are key to executing our growth strategy and achieving our business goals.
+Added: Following the acquisition of United Grocery Outlet in fiscal 2024, our employee population doubled due to the majority of the UGO stores being Company-operated.
+Added: As of January 3, 2026, we had 2,207 employees, 1,642 of whom were full-time and 565 of whom were part-time.
+Added: As of January 3, 2026, 562 of our employees worked in our corporate organization, 167 of which were classified as field employees, and our distribution centers employed 515 persons.
The remaining employees were employees in our Company-operated stores.
−Removed: As of December 28, 2024, 139 of our employees were union employees, all of whom were employees at two Company-operated stores.
+Added: As of January 3, 2026, 158 of our employees were union employees, all of whom were employees at two Company-operated stores.
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: In the first quarter of fiscal 2025, we implemented a reduction to our workforce by approximately 40 full-time employees.
−Removed: 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.
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Additionally, we provide generous and highly competitive health and welfare benefits programs.
−Removed: Equity, Diversity and Inclusion —We believe that a diverse and inclusive team is important to our long-term business success.
+Added: Equity and Inclusion —We prioritize our values and culture, as well as our inclusion initiatives, and help to create opportunities for our employees to grow and thrive.
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.
−Removed: Equal Employment Opportunity Commission, beginning with fiscal 2024 data to be included in our Impact Report that will be published in 2025.
−Removed: 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.
+Added: Equal Employment Opportunity Commission, beginning with fiscal 2024 data included in our Impact Report that was published in 2025.
We strive to nurture and uphold an inclusive and diverse environment, free from discrimination of any kind, including sexual or other discriminatory/harassing behavior.
7 unchanged sentences
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.