Supermarket chains regularly review their store locations to determine if keeping certain sites open make economic sense.
Chains will often close an underperforming or unprofitable unit when a site’s lease is set to expire. If it’s a dire situation, a grocery company might close a location before the lease expiration date.
Grocery store chain Raley’s will close its Nob Hill Foods store in Los Gatos, Calif., when its lease expires in June 2027, after reviewing the store’s performance and current economic conditions, the company’s Chief Marketing Officer Carol Barsotti told SFGate.
The 91-year-old grocery store chain said that it will offer jobs to affected employees at other Raley’s locations.
Raley’s closes multiple store locations
The West Sacramento, Calif.-based supermarket owner has faced performance issues over the last year, leading the company to close several underperforming store locations.
The Los Gatos store announcement follows the grocery store chain’s closing of its Nob Hill Foods store in Mountain View, Calif., on May 29, 2026, also because of its performance and current economic conditions. It laid off 50 employees in the Mountain View store.
The company additionally closed a Raley’s store in Roseville, Calif., in January 2026.
Grocery stores face challenges to remain profitable, including competition from regional and national supermarket chains, rising costs of products and labor driven by inflation, consumers’ changing attitudes toward products, and lease rates that don’t make economic sense.
Inflation rises, revenue stalls
Supermarkets faced increased food-at-home inflation after the 2020 Covid-19 pandemic, rising by 11.4% in 2022 and 5% in 2023, while revenue peaked only 0.5% higher in 2022 year-over-year, before falling below 2021 levels in 2023 and 2024 and recovering in 2025, according to data from IBISWorld.
Several supermarket chains have closed underperforming locations, including 78-year-old grocery chain operator, Cosentino’s Food Stores, which closed its Price Chopper location in Overland Park, Kan., in February, marking the first store it has closed in its history.
Cosentino’s operates 24 Price Chopper, three Sun Fresh, three Cosentino’s Markets, two Apple Market, and a Market 48 Liquor.
Cosentino’s is not affiliated with Schenectady, N.Y.-based Northeast Grocery, which operates Price Chopper, Market 32, and Tops Friendly Markets in New York, Massachusetts, Vermont, Connecticut, Pennsylvania, and New Hampshire.
Kroger closing stores
Giant supermarket chain Kroger said it expected to close approximately 60 stores across its portfolio by the end of 2026, according to the company’s first-quarter fiscal 2025 earnings call.
Dutch grocery giant Ahold Delhaize’s Stop & Shop chain confirmed in July that it will close store locations in Basking Ridge and Westfield, N.J.
Raley’s operates about 235 stores
Raley’s opened its first grocery store in Placerville, Calif., in 1935 and grew in California and Nevada before expanding to more states through grocery store acquisitions.
The chain formed The Raley’s Companies in 2021 after the purchase of the Bashas Family of Stores. It currently operates about 235 grocery stores in seven states and four tribal nations under its brands, including the Raley’s, Bel Air, Nob Hill Foods, Raley’s O-N-E Market, Bashas, Bashas Dine, Food City, and Eddie’s Country Store brands, according to its website.
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