For many shoppers, finding a great deal has become less of a welcome surprise and more of a necessity.
In 2025, grocery sales increased 1.2% while volume fell by 1%, according to McKinsey’s 2026 State of Grocery report. That dichotomy is perhaps one of the clearest examples of how stretched grocery shoppers have become. They’re spending more but are actually getting less.
Grocery Outlet is leaning into that growing demand for bargains.
The 80-year-old discount grocer is putting a renewed emphasis on the “treasure hunt” experience that has long differentiated it from conventional supermarkets, seeking out opportunistic merchandise that can be sold at steep discounts.
And Wall Street is taking note.
Grocery Outlet’s bargain strategy hit a snag
Earlier this year, Grocery Outlet shared that it would close 36 underperforming stores.
During the company’s fourth-quarter fiscal year 2025 earnings call, CEO Jason Potter pointed to three factors behind the closing of those locations.
One was the retailer stepping back from a strategy that had long been a core part of its identity.
“Our push to improve in-stocks and add assortment to ensure the availability of everyday items squeezed our supply chain, impacting our ability to deliver high-quality opportunistic products that drive value in this business,” Potter said.
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Opportunistic products or merchandise are the goods bought by retailers like Grocery Outlet at deeply discounted prices. Typically, the products come from manufacturers with excess inventory or those that have implemented recent packaging or ingredient changes, rendering existing products obsolete.
“Shoppers came in looking for the value and the treasure hunt experience they expect from Grocery Outlet, but left with fewer items per trip because we didn’t deliver the weight of wow items and the breadth of assortment that drives basket size and value,” he continued.
To improve sales, Potter said the chain was taking steps to return to that treasure-hunt experience.
“Over the next several months, our team is intensely focused on ensuring we have the right weight and depth of quality, opportunistic branded product flowing into our mix to restore a winning position on value with our customer,” he told investors.
Grocery Outlet is bringing the treasure hunt back
Two quarters later, there are signs that the strategy is starting to work.
In a recent note from Bank of America Global Research shared with TheStreet, Research Analyst Robert Ohmes upgraded Grocery Outlet stock from neutral to buy, writing that, “under CEO Jason Potter, Grocery Outlet is rebuilding the treasure hunt experience and restoring opportunistic buying.”
“The renewed focus on opportunistic merch should be a powerful traffic & basket driver,” he continued.
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The results are also showing up in the company’s financials.
At the close of the second quarter of the 2026 fiscal year, comparable store sales saw a 70-point improvement over the previous quarter, basket size improved by 100 points, and traffic increased by 1.8%.
“Our first half progress reinforces our confidence that restoring the core strengths of the Grocery Outlet model can drive sustainable improvement,” Potter told investors during the August call.
“Since the start of this year, we’ve prioritized improved sourcing, product flow, visibility, and store-level execution while expanding key supplier relationships,” he continued. “Together, these actions have significantly increased and strengthened our opportunistic assortment and improved our mix.”
Grocery Outlet’s return to its roots is good for shoppers
Grocery Outlet’s return to a treasure-hunt strategy is good news for shoppers.
One survey by global marketing firm Advantage Solutions found that 72% of shoppers spent more on groceries this year than last year.
With grocery budgets strained, the majority of shoppers also reported prioritizing necessities over aspirational or “fun” products.
Grocery Outlet’s treasure-hunt model means shoppers don’t necessarily have to choose between saving money and having a little fun.
Instead, it offers even the consumer a chance to find deeply discounted products while discovering something they weren’t necessarily looking for.
If the retailer can make those unexpected bargains a more consistent part of the shopping experience, the strategy could be just the thing to help drive traffic and improve sales.