📜 What This Document Is 🗳️

This document is a Proxy Statement (DEF 14A), which is essentially a voter's handbook. It was filed by Grocery Outlet Holding Corp. to shareholders before the 2026 Annual Meeting. Unlike an earnings report, this document doesn't focus on quarterly sales figures; instead, it tells you everything you need to know about the company's governance, its leadership, its executive compensation, and, most importantly, what to vote on at the upcoming annual meeting.

👉 The goal of the Proxy Statement is to provide transparency and educate shareholders on who the board directors are, how they are paid, and what the company’s strategic priorities are for the coming year.

🏪 About Grocery Outlet Holding Corp. 🌿

For readers new to the company, it's helpful to understand what Grocery Outlet does and how it operates. The company is a growth-oriented "extreme value retailer," meaning it focuses on offering high-quality, name-brand products at deeply discounted prices.

👉 In simple terms, Grocery Outlet operates a network of independently run stores across many states (including California, Washington, Oregon, Pennsylvania, Tennessee, etc.). This unique, independent operator model is a key part of its business differentiation.

📣 Strategic Outlook and Management Focus 📈

In their letter to shareholders, the leadership team outlined a major pivot for the company. They admitted that while early results from "foundational work" were encouraging (increased store traffic, better operator sentiment), the second-half performance fell short. They believe the required path to sustained growth requires significant adjustments.

👉 The core message is a strategic tightening: the company plans to "double-down on our opportunistic product pipeline, optimizing our store network, and exiting locations without a viable path to sustained profitability." This means they are getting more focused and selective about which stores they keep open.

• Operational Goals: The company is elevating the in-store customer experience, expanding its store refresh program, and continuing to open new stores while actively closing underperforming ones to operate a more focused network.
• Board Strength: They noted they added four independent directors over the past year to strengthen the Board's expertise in areas like supply chain, technology, and strategic finance.
• CEO Commentary: Jason Potter, President and CEO, is the day-to-day operational leader. He emphasizes the importance of the independent operators, stating that their "unique buying and selling approach remains a durable point of differentiation."

💰 Financial Performance (FY 2025) 💸

While this filing is a proxy statement, it included key financial metrics for Fiscal Year 2025, providing a snapshot of the company’s health. These figures allow shareholders to see how the company performed against its financial targets.

👉 Although the company made progress on strategic goals in FY 2025, the financial outcome was "below expectations," indicating a period of necessary restructuring and cost management.

• Net Sales: Reached $4.69 billion, reflecting a 7.3% increase. This shows the company's total sales revenue grew year-over-year.
• Comparable Store Sales: Hit $224.9 million, indicating growth in sales at stores that were already open.
• Net Loss: The company reported a Net Loss of $2.30 (Diluted Net Loss Per Share). This negative income figure is key, as it signals that, overall, the company spent more money than it brought in during the fiscal year.
• Adjusted EBITDA: The metric reached $254.3 million Adjusted EBITDA, which was calculated to be 5.4% of Net Sales. This metric is often used to gauge operating cash flow before accounting for specific non-cash items, giving a clearer view of core business profitability.
• Store Count: At the end of FY 2025, the company operated 570 Stores, and it opened 37 Net New Stores.

🗳️ Voting Instructions and Key Dates 📅

The filing provides critical information on how and when shareholders can participate in the voting process. It also includes the specific proposals that will be voted upon.

👉 Shareholders must plan to vote on proposals like the election of directors and compensation approvals. For the most part, the company strongly encourages voting online or by phone to reduce costs and environmental impact.

• Annual Meeting Date: The 2026 Annual Meeting of Stockholders is scheduled for Monday, June 1, 2026, at 11:00 a.m. Pacific Daylight Time.
• Record Date: To vote, stockholders must be of record as of April 7, 2026.
• Voting Methods: Votes can be cast via the Internet, by Telephone (1-800-690-6903), or by Mail.
• Board Recommendations: The board recommends voting in favor of the proposals, including the election of the ten directors, the ratification of the independent public accounting firm, and the advisory votes regarding executive compensation.

👑 Board of Directors and Governance 🏛️

This section details the corporate structure and governance principles, which are crucial for understanding accountability. The Proxy Statement outlines the rules by which the board operates and who is eligible to serve.

👉 The Board has strategically refined its governance structure by adopting principles designed to ensure the board remains highly independent, manages risk effectively, and maintains strong oversight of strategy and operations.

• Board Structure Change: The company formally amended its corporate charter in 2022 to eliminate the concept of "classified" board seats. This means, starting in 2026, all directors will serve on a one-year term.
• Board Refreshment: The Board noted that they have made efforts to refresh their membership by appointing four directors in the past year (Kobayashi, Molloy, Allen, and Thornton) to ensure the Board's expertise aligns with the company’s current strategic needs.
• Board Diversity of Skills: The Nominating and Corporate Governance Committee assessed the board, noting the strong collective expertise, particularly in:
  • Retail/CPG: 7 directors have experience in the retail and consumer packaged goods industry.
  • Digital Transformation: 8 directors have expertise in this area, recognizing its importance to modern business operations.
  • Corporate Governance: 10 directors possess governance skills, showing comprehensive experience across the industry.

💸 Executive Compensation Plan 💲

Executive pay is a primary focus of the Proxy Statement because it directly links executive rewards to company performance. This section explains the structure of the "at-risk" compensation plan for the Named Executive Officers (NEOs).

👉 The key change highlighted is the intentional shift to tie a larger portion of executive pay to equity that performs over the long term, requiring deep commitment and focusing pay on shareholder value creation.

• Variable Pay Focus: For Fiscal Year 2025, approximately 84% of the CEO's and 72% of other NEOs' target total direct compensation was "variable" (or "at risk"). This means a large portion of their pay is not guaranteed.
• Shift to Stock Options: The Compensation Committee replaced time-based Restricted Stock Units (RSUs) with stock options. Stock options only grant value when the stock price actually rises, directly aligning executive incentives with shareholder success.
• Performance-Based Units (PSUs): The company also shifted the mix of equity to 50% PSUs and 50% stock options (based on grant date value). PSUs reward executives for multi-year performance targets (Net Sales and Adjusted EPS over three years), reinforcing long-term, disciplined decision-making.

👨‍💼 Key Leadership and Director Profiles 🌟

The Proxy Statement provides extensive biographical details on all director nominees, allowing shareholders to evaluate the experience and expertise that will guide the company.

👉 The current leadership is heavily vested in the company's unique history. Eric J. Lindberg, Jr. and Jason Potter have long operational histories with Grocery Outlet, which gives the board deep, specialized knowledge of the business.

• Eric J. Lindberg, Jr. (Chairman of the Board): He has a 26-year history with Grocery Outlet, having been in leadership roles (including CEO/Co-CEO) since 2006. His experience is noted as "transformative," having overseen the growth of the store base from 123 to 441 stores.
• Jason Potter (President and CEO): Potter brought significant external retail expertise from his time at The Fresh Market, Inc., and Sobeys Inc. He brings specific expertise in large-scale operations, complex supply chain, and customer-centric retail management.
• Diversity of Expertise: The nominated directors bring a mix of skills, including deep knowledge of general retail (Frances L. Allen), financial and accounting rigor (John "Jeb" E. Bachman), and extensive supply chain/omnichannel experience (Michael K. Kobayashi, Carey F. Jaros).

📞 Where to Find More Information 🌐

This final section details where shareholders can access more materials and who they can contact regarding their voting rights or governance questions.

👉 If you need to vote or review other corporate documents, specific websites and phone numbers are provided, emphasizing the importance of using digital methods.

• Proxy Materials: The official Proxy Statement and Annual Report (10-K) for Fiscal Year 2025 are available electronically at www.proxyvote.com.
• Company Contact: The general governance contact for questions is handled by Luke D. Thompson, EVP, General Counsel and Secretary.
• Voting Support: The proxy materials provide multiple avenues for voting by Internet, Telephone (1-800-690-6903), or Mail.

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🧠 The Analogy 🛠️

Think of the company's board of directors and this proxy statement like a car's steering committee. The car (Grocery Outlet) was running fine, but recent market pressures meant they needed to know exactly where to steer next. The proxy statement is the detailed map and rulebook meeting where the steering committee (the Board) meets with the passengers (the Shareholders). They aren't just listing names; they are explaining why their collective skills—from financial engineering (the accountants) to marketing genius (the retail veterans) to supply chain mastery (the logistics experts)—are necessary to fix the current path and get the car back on the road to sustainable, profitable growth.

🧩 Final Takeaway 💡

Grocery Outlet is currently in an execution-focused period, signaled by their commitment to closing underperforming locations and refining their store network. Shareholders should pay close attention to the shift in executive pay to performance-based equity, which directly ties management's financial reward to the company's ability to achieve long-term, sustained profitability.