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Grocery Outlet is closing stores in South Jersey, Philadelphia, and Kennett Square

Company executives say its bottom line is being impacted by dozens of "underperforming" locations, including eight in the Philly region.

A Grocery Outlet bargain market is pictured in the Sharswood section of Philadelphia in 2022. This location is not among those closing, but two other city stores will shut their doors for good.
A Grocery Outlet bargain market is pictured in the Sharswood section of Philadelphia in 2022. This location is not among those closing, but two other city stores will shut their doors for good.Read moreALEJANDRO A. ALVAREZ / Staff Photographer

Grocery Outlet bargain market is closing dozens of stores nationwide, including eight in the Philadelphia area.

The closures were first referenced earlier this week in the company’s earnings report. The California-based grocer recorded an operating loss of $221.7 million last year, much of which it attributed to “certain underperforming stores” that will now close.

These include five Grocery Outlets in South Jersey, two in Philadelphia, and one in Kennett Square, according to real estate marketing released Thursday.

A company spokesperson did not return a request for comment about when the stores would close.

The impacted Philly-area stores are located at:

  1. 4004 U.S. Route 130, Delran

  2. 401 Harmony Rd., Gibbstown

  3. 345 Scarlet Rd., Kennett Square

  4. 190 Hamilton Commons Dr., Mays Landing

  5. 2017 W. Oregon Ave., Philadelphia

  6. 2524 Welsh Rd., Philadelphia

  7. 3174 U.S. Route 9 S., Suite 5, Rio Grande

  8. 677 Berlin-Cross Keys Rd., Sicklerville

Gordon Brothers, a Boston investment firm, is looking to sublease all 36 closing Grocery Outlets. The Philadelphia-area properties range in size from 14,000 to 21,000 square feet.

After the closures, the chain will still have several locations in the city, collar counties, and South Jersey.

Grocery Outlet calls itself an “extreme value retailer.” It was founded in 1946, and has expanded from 128 stores to 570 stores over the past two decades. Many locations are operated by entrepreneurs who live nearby.

In recent months, Grocery Outlet’s bottom line was impacted by economic uncertainty, as well as the November suspension of SNAP benefits that tens of millions of U.S. consumers rely on, according to president and CEO Jason Potter.

“Consumer pressure intensified, federally funded benefits were delayed, and competition grew more promotional in the fourth quarter,” Potter said in a statement. “In response, we have begun to sharpen our focus on what matters most: delivering clearer value and a better in-store experience.”

While the grocery industry remains relatively resilient, it has faced a challenging few years with persistent inflation, tariffs that further drove up prices on some products, and continued competition from other retailers and restaurants.

In recent weeks, Amazon closed all of its brick-and-mortar Amazon Fresh stores, including six in the Philadelphia region. The company says it plans to expand grocery-delivery services and open more Whole Foods markets, to the dismay of some Amazon Fresh customers who said they were drawn to the low prices at the smaller-format stores.

» READ MORE: What makes someone love their grocery store? Ask the Philadelphians who are already missing their Amazon Fresh.

Gourmet markets have been impacted, too. Three Di Bruno Bros. locations in Ardmore and Wayne closed last month, two years after being acquired by Wakefern Food Corp., the North Jersey-based supermarket cooperative that operates ShopRite.

A Wakefern spokesperson said the company planned to refocus on its flagship stores in South Philadelphia and Rittenhouse, as well as its growing online business. The move, spokesperson Maureen Gillespie said, would be “a positive reset that allows us to preserve and elevate the in‑store tradition while growing the brand’s reach in meaningful new ways."