Grocery Outlet just downgraded at Goldman Sachs, here’s why

Goldman Sachs double downgraded Grocery Outlet to Sell from Buy with a price target of $24, down from $33. The analyst cites slowing new store trends, including the firm’s new analysis on Placer traffic and Google search trends by state, for the downgrade. Grocery Outlet’s traffic risk skews to the downside after two years of strength and the focus on value by consumers likely normalizes, the analyst tells investors in a research note. Goldman sees the company’s gross margin moderating from elevated levels as the closeout buying environment potentially normalizes and notes promotional activity appears to be increasing towards the lower end consumer.