Grocery Outlet Holding Corp 4Q23: Sales +6.3%, Adjusted EBITDA +18%

Mar 5, 2024 | Corporate Insights, No Bull Economics

While food inflation has been moderating, consumers still face higher food prices & other financial burdens according to Grocery Outlet Holding Corp. Further, consumer pressure is aggravated by high interest rates & consumer credit. While this value-oriented chain is well positioned in today’s economy, it reports a lower basket indicative of smaller, more frequent trips & moderating inflation (retail prices).


  • 4Q23 sales increased +6.3% y/y, driven by +2.7% comparable store sales (+7.5% transactions/-4.5% decline in average basket). Results reflected the chain’s ability to deliver unbeatable value with an exciting “treasure hunt experience”.
  • Full-year 2023 sales grew +11% y/y to a record $4B, driven by +7.5% comps which included an +8.3% customer count.
  • Full-year 2024 comps are expected to increase +3% to +4%, driven by transactions partially offset by a lower basket. While food inflation is expected to continue moderating, it remains high in absolute terms.


  • Promotional activity remains very rational according to the company.
  • Management reports a healthy purchasing backdrop, with good deal flow, that further benefits from the company’s technology implementation.
  • The system is rolling out a new personalization app & management plans to begin investing in marketing to drive downloads & adoption. This app will communicate weekly deals to customers, helping customize their treasure hunt experience.
  • Plans to launch a new, cost-effective private-label grocery program later this year.
  • Plans to open 55 to 60 net new stores this year, and with 100 approved sites for 2025 & 2026, the chain is in a good position to deliver its +10% annual unit growth goal.
  • While new store construction costs have increased +25% from the $2MM level in 2019, they are generating a 30% ROIC.

United Grocery Outlet Acquisition

  • The acquisition of United Grocery Outlet added 40 stores across Tennessee, North Carolina, Georgia, Alabama, Kentucky & Virginia to Grocery Outlet Holding’s network. United Grocery Outlet stores average 17,000 square feet and have enjoyed healthy same-store sales growth in recent years, driven by both transaction count & ring. United Grocery Outlet also operates a distribution center that can support additional new store growth in the broader Southeast region to help United Grocery Outlet pursue its goal to expand to 4,000+ stores in white spaces across the U.S.

Grocery Outlet Holding 4Q23 Financials

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