Companies make tough, sometimes surprising decisions to protect their long-term financial health. While store closures are common during economic downturns, selling underperforming locations to competitors remains one of the most unexpected strategic moves.

In recent years, grocery store chains nationwide have reassessed their operations as inflation, changing consumer behaviors, and ongoing economic uncertainty have significantly impacted profitability. These evaluations have led to widespread store closures and mass layoffs, leaving some communities with limited access to nearby grocery stores and essential goods.

Now, another grocery store chain has joined the growing list of retail closures, becoming the latest casualty.

Gelson’s Markets sells unprofitable store to Kroger

Gelson’s Markets revealed that it will permanently close its Carlsbad, California, store located at 7660 El Camino Real on February 28, 2026, according to a notice posted on its website. The closure marks the end of its decade-long presence in the community.

However, the space won’t be vacant for long because Gelson’s Markets has already reached an agreement to sell the location to Kroger-owned Ralphs, according to a statement emailed to Grocery Dive on December 29.

While financial terms of the deal were not disclosed, Ralphs is expected to take over ownership and operations on March 9.

The sale follows years of financial struggles at the Carlsbad store. Despite efforts to improve performance, the location remained unprofitable.

“This store has faced ongoing financial challenges for several years, and despite continued efforts to improve performance, it remains unprofitable. After careful consideration, we made the difficult decision to sell the store,” said Gelson’s Markets in the emailed statement.

Although some positions will be affected by the closure, the company stated Kroger will retain as many employees as possible to minimize job losses.

Gelson’s Markets emphasized that the closure will not impact its broader operations. The company will continue running its remaining 27 stores across Southern California and plans to open a new 10,000-square-foot small-format location in Toluca Lake, California, on January 28, according to a press release on its website.

Gelson’s Markets closes an unprofitable location and sells space to Kroger.

Shutterstock

Gelson’s Markets’ history

Founded in 1951, Gelson’s Markets is a regional grocery store chain that has evolved into an upscale, multi-departmental supermarket brand with dozens of locations throughout Southern California.

The company’s roots trace back to the Mayfair Companies, which merged its eight California stores with Van’s Markets’ 43 locations in 1948 under the ownership of Arden Farms Co. (now Arden Group [ARDNA]), forming the Mayfair Markets chain.

At its peak, Mayfair operated 250 stores across Arizona, Utah, Oregon, Washington state, and Nevada.

More Store Closures:

• 62-year-old retail chain is quietly closing stores across the US
• Kroger announces more closures and cuts ahead of the holidays
• Another grocery store chain closing locations in key market

As consumer preferences shifted, most Mayfair stores were sold, and the remaining locations were rebranded under the Gelson’s Markets name.

In 2014, private equity firm TPG acquired Gelson’s Markets, supporting its expansion efforts. The chain was later sold to Japan-based Pan Pacific International Holdings (DQJCF).

To avoid the widespread closures that Mayfair faced, Gelson’s Markets has focused on store renovations and expanding its private-label offerings to stay competitive, according to the history section of its website.

Major grocery chains closing stores in 2025

• Walmart: Closing 11 underperforming stores across five states. (Source:The Street)
• Kroger: Plans to close 60 underperforming stores nationwide by the end of 2026, with 39 expected to shutter in 2025. (Source:Grocery Dive)
• Stop & Shop: Closed more than 30 underperforming stores in 2024 and seven warerooms in 2025. (Source:Ahold Delhaize)
• Winn-Dixie: Parent company Southeastern Grocers plans to sell 32 Winn-Dixie stores and eight Harveys Supermarket across four states ahead of its rebrand as The Winn-Dixie Company in early 2026. (Source:The Street)
• Homeland Acquisitions Corp: Closed five supermarkets under its Homeland, United Supermarket, Piggly Wiggly, and Discount Foods banners across Oklahoma and Georgia. (Source:The Street)
• Price Chopper: Shuttered several underperforming locations across multiple states since 2024, including a store in Gloversville, New York, in 2026. (Source:The Street)

The broader impact of retail store closures

Economic uncertainty, evolving consumer habits, and ongoing trade pressures are forcing many U.S. retailers to downsize or consolidate their operations. These closures have contributed to a surge in layoffs during a period when inflation and rising costs are straining household finances.

In 2025, more than 1.2 million job cuts were made, representing a 58% increase from the previous year, according to the Challenger, Gray, & Christmas 2025 Job Cut Announcement Report. The retail sector alone accounted for nearly 93,000 layoff announcements, a 123% increase.

California reported the highest number of layoffs nationwide that same year, with approximately 94,116 employees affected across 1,581 WARN notices, per WARN Tracker.

“The widespread closures of physical retail stores in the digital age significantly impact business outcomes, urban communities, and regional economies,” said industry experts at ScienceDirect. “Understanding this phenomenon is crucial for retailers, policymakers, and society at large.”

According to the U.S. Bureau of Labor Statistics‘ Employment Situation update, 911,000 fewer jobs than expected were added in the 12 months through March 2025, signaling a notable slowdown.

In August, only 22,000 new non-farm payrolls were recorded, while the unemployment rate rose to 4.3%, the highest level in nearly four years.

“While the pace of layoffs has picked up somewhat, the hiring rate remains quite low. It is increasingly difficult for those laid off, and for new entrants into the job market, to find a position,” said The Mortgage Bankers Association Chief Economist Mike Fratantoni in a statement.

Related: Two leading grocery chains make holiday season cuts, store closures