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EMERYVILLE, Calif. — Grocery Outlet Holding Corp., the extreme-value grocer known for its “treasure hunt” shopping experience, has announced the resignation of RJ Sheedy, its president and chief executive officer. Sheedy also vacated his position on the company’s board of directors. Eric Lindberg, the current chairman and former CEO, has been named interim president and CEO, effective immediately.
Grocery Outlet said it has retained a global executive search firm to identify a permanent successor for Sheedy.
“On behalf of the board, I want to express my deep appreciation to RJ for his contributions to Grocery Outlet over the past 12 years,” Lindberg said in a statement. “RJ played a critical role in scaling and evolving our business and has set the stage for continued strong growth in the future.”
Sheedy’s resignation less than two years after he took over as CEO in January 2023. Sheedy first joined Grocery Outlet in 2012 as vice president of strategy, eventually rising to executive vice president and chief merchandise, marketing, and strategy officer before assuming the role of CEO.
The leadership transition comes as Grocery Outlet navigates a challenging economic environment. The company reported a 42.8% decrease in net income in the second quarter, citing intensified pricing competition as a key challenge. Despite these hurdles, Sheedy emphasized the company’s adaptability, stating during the Q2 earnings call in August that Grocery Outlet was making “adjustments to drive value for customers” through strategic pricing and marketing initiatives.
Lindberg, who previously served as CEO or co-CEO of the company from 2006 to 2022, assured stakeholders that Grocery Outlet remains well-positioned for growth despite Sheedy’s departure.
“The fundamentals of our business—the significant value and treasure hunt shopping experience we bring to customers—remain strong, and the runway in front of us is substantial,” Lindberg said. He further emphasized his commitment to collaborating with Grocery Outlet’s employees, independent operators, and supplier partners to “unlock Grocery Outlet’s earnings potential.”
While the company awaits its formal Q3 earnings report, scheduled for release on November 5, it has offered preliminary results indicating a positive trajectory. Grocery Outlet projects Q3 net sales of $1.1 billion, marking a 10.4% year-over-year increase, with comparable-store sales up 1.2% from the prior year. Additionally, Grocery Outlet expects to surpass the high end of its full-year net sales guidance of $4.30 to $4.35 billion.
However, the company is adjusting its expectations for full-year adjusted EBITDA, which it now anticipates will fall below the previously disclosed range of $252 million to $260 million. This guidance recalibration reflects ongoing efforts to optimize profitability while navigating increased competitive pressures and a fluctuating retail landscape.
Grocery Outlet recently took a significant step in its expansion strategy by acquiring United Grocery Outlet. This acquisition added 40 stores and a distribution center, bringing the company's total store count to nearly 500 across nine states. The acquisition bolsters Grocery Outlet’s footprint, providing a platform for continued growth and reinforcing its value proposition in the discount grocery sector.
With Lindberg’s return to an active executive role, Grocery Outlet’s board aims to maintain stability during the search for a new leader, one who will advance Sheedy’s strategic vision while adapting to evolving market demands. As the company reassesses its approach and bolsters its competitive stance, Lindberg’s interim leadership is expected to prioritize reinforcing the company’s strengths in pricing and customer experience.
Grocery Outlet’s unique model, offering discounts on high-quality surplus goods, has gained traction among price-conscious shoppers. Moving forward, analysts and stakeholders will monitor how the leadership transition and strategy adjustments affect the company’s performance in the increasingly competitive discount grocery sector.
