Grocery Outlet Overhauls Strategy, Merging Departments Amid Market Pressure

EMERYVILLE, CA – January 13, 2026 – Grocery Outlet Holding Corp. is undertaking a significant strategic overhaul, announcing today the retirement of a three-decade veteran and the integration of its core purchasing and merchandising divisions. The move comes as the extreme value retailer navigates considerable financial headwinds, including a slumping stock price and concerns over profitability.

Steve Wilson, the company’s Executive Vice President and Chief Purchasing Officer, will retire on March 20, 2026, after 31 years of service. His departure marks the end of an era for the company, whose unique sourcing model he was instrumental in building. Taking the helm of a newly combined department is Matt Delly, who joined Grocery Outlet last year as Chief Merchandising Officer. Delly will now serve as Chief Merchandising and Purchasing Officer, a title reflecting his expanded responsibilities over the entire product lifecycle, from sourcing to in-store presentation.

In a statement, President and CEO Jason Potter framed the move as a strategic imperative. “Combining our strong buying team with our new merchandising capabilities will advance our ongoing efforts to become a great selling organization,” he said. The integration is designed to “increase efficiency and strengthen performance” as part of a broader goal to improve execution at scale.

A Legacy of Opportunistic Buying

Steve Wilson’s retirement represents a major changing of the guard. For over three decades, he was a key architect of Grocery Outlet’s distinct identity in the competitive discount grocery sector. His leadership was foundational in creating what the company calls its “unique buying model,” which relies on a network of deep supplier relationships to acquire brand-name products through opportunistic buys—such as packaging changes, surplus inventory, or seasonal overstocks.

“Steve has been instrumental in shaping Grocery Outlet’s product and purchasing strategy and customer value proposition,” Potter acknowledged, praising Wilson for building an “extraordinary buying team with deep expertise and the critical supplier relationships that are essential to support our unique buying model.”

This model is the engine behind the “treasure hunt” shopping experience that defines the retailer, where customers discover an ever-changing assortment of high-quality, name-brand goods at steep discounts. Wilson’s influence was also felt in recent strategic initiatives, including the 2024 launch of the company’s private label program, “GO Brands,” which was designed to complement the core assortment and enhance value for shoppers. The transition plan involves Wilson working closely with leadership over the next few months to ensure a smooth integration of the two functions he helped define.

A New Era of Integrated Strategy

The decision to place both purchasing and merchandising under Matt Delly signals a deliberate shift in strategy. While Wilson’s legacy was built on mastering the art of the buy, Delly is tasked with blending that art with the science of merchandising. Since his arrival, Delly has been recognized internally for his “strategic rigor and operational discipline,” qualities the CEO believes are critical to improving current efficiency while building a foundation for future growth.

By uniting these two functions, Grocery Outlet aims to create a more seamless and data-informed pipeline from supplier to shelf. In theory, this integration should lead to better inventory alignment, reduced waste, more cohesive marketing, and a faster response to consumer trends. It reflects a broader trend in retail where companies are breaking down traditional silos to create more agile and efficient operations.

“I look forward to working with Matt and his newly integrated team as we build on and enhance the longstanding buying strength that truly differentiates Grocery Outlet, while driving better execution and increased support for our independent operators and our customers,” Potter stated. This emphasis on supporting the company’s network of over 560 independently operated stores suggests the changes are also intended to improve product flow and promotional effectiveness at the store level.

Navigating Financial Headwinds

This strategic restructuring is not happening in a vacuum. Grocery Outlet has faced a challenging year in the market, with its stock (NASDAQ: GO) trading near its 52-week low after declining over 42% in the past twelve months. While the company has continued to grow its footprint and top-line revenue—reporting a 7.22% increase over the last year—profitability has been elusive.

InvestingPro data shows the company was not profitable over the past year, with a razor-thin operating margin of 1.55% and a net margin of -0.1%. Recent earnings reports have painted a mixed picture. In November 2025, the company beat Q3 earnings estimates but reported comparable store sales growth of just 1.2%, falling short of analyst expectations and prompting downgrades from Telsey Advisory Group and BofA Securities. Earlier, Q4 2024 results revealed that profitability was negatively impacted by higher-than-expected shrinkage, or inventory loss.

The company's Altman Z-Score of 1.84, a measure of bankruptcy risk, places it in a “grey area,” indicating a degree of financial stress. Analysts, however, do project a return to profitability for the current fiscal year. This financial backdrop makes the push for efficiency and stronger execution under Delly’s integrated leadership all the more critical. Investors and analysts will be watching closely to see if this new structure can translate top-line growth into bottom-line results by improving margins and controlling costs.

The Future of the 'Treasure Hunt'

For customers and the independent operators who run the stores, the ultimate impact of this change remains to be seen. The core question is how an integrated sourcing and selling strategy will affect the signature “treasure hunt” experience. A more disciplined, data-driven approach to merchandising could lead to a more predictable product mix, potentially at the expense of the spontaneous, surprise-filled shopping trips that loyalists have come to love.

Conversely, a more efficient system could empower buyers to secure even better deals and pass those savings on, enhancing the value proposition. It could also improve the in-store experience by ensuring a better flow of high-demand products and more effective support for the independent owner-operators who are the face of the brand in their communities.

The company is betting that this evolution will strengthen, not dilute, its competitive advantage. By merging the art of the deal with the science of sales, Grocery Outlet aims to fortify its unique business model for a new chapter of growth. The next indication of whether the strategy is paying off will come when the company reports its next earnings on March 3, 2026, offering the first glimpse into the performance of this newly unified team.