Grocery Outlet President and CEO abruptly resigns

Less than a week from its third-quarter earnings call and lackluster Q2 results, Grocery Outlet President and CEO RJ Sheedy has stepped down and resigned from his position on the company’s board of directors, the grocer announced on Wednesday. 

Grocery Outlet Chairman of the Board Eric Lindberg will serve as interim president and CEO until the retailer finds a permanent replacement. 

“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,” said Lindberg. “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 departure comes less than two years after assuming the role of CEO in January 2023, when he succeeded Lindberg, who was then elevated to chairman of the board. 

Prior to assuming the role of president in January 2019, Sheedy was executive vice president and chief merchandise, marketing, and strategy officer. He joined Grocery Outlet in 2012 as vice president of strategy. 

Prior to Grocery Outlet, Sheedy spent about seven years at office supply retailer Staples, where he served as vice president of strategy. 

Grocery Outlet faced a difficult second quarter, when net income declined 42.8%, and gross margins as a percentage of sales dropped 140 basis points to 30.9%. 

In August, Sheedy said the disappointing results in same-store sales were due in part to aggressive pricing from competitors. 

“We are confident in the adjustments we are making to drive value for customers,” Sheedy said in Grocery Outlet’s Q2 conference call in August.

Sharpened pricing and new marketing initiatives would right the ship, Sheedy said. “This is a very flexible and dynamic business model, and we are able to pivot [quickly],” Sheedy noted.

Lindberg aimed to ease concerns over Sheedy’s departure on Wednesday.

“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 in a statement. “I look forward to working with our employees, independent operators, and supplier partners to deliver outstanding execution on our strategy and unlock Grocery Outlet’s earnings potential.” 

Although the grocery chain’s Q3 report isn’t scheduled until Nov. 5, Grocery Outlet gave a glimpse into the results on Wednesday, revealing that it expects net sales to come in at $1.1 billion for the quarter, up 10.4% from the same period a year ago. 

Comparable-store sales were up 1.2% for the quarter year over year. 

Grocery Outlet expects to exceed the high end of the range for its full-year net sales guidance of $4.30 to $4.35 billion, but it is adjusting its full-year EBITDA guidance to below the low end of its earlier estimated range of $252 to $260 million.

The extreme discount grocer purchased United Grocery Outlet earlier this year, which added 40 stores and a distribution center to its roster of nearly 500 stores across nine states.