Major supermarket chains, including Kroger, Stop & Shop, and The Raley's Companies, remain in a downsizing mode that began in 2025 and will continue for some companies through 2027.

Kroger, the largest U.S. supermarket operator by revenue, 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. Ahold Delhaize's Stop & Shop chain confirmed in July that it will close store locations in Basking Ridge and Westfield, N.J., also in 2026, extending a retrenchment that already saw it close about 32 underperforming stores in 2024.

Raley's has now said it will close another Northern California store, located in Petaluma, Calif., on Jan. 26, 2027, affecting 48 workers' jobs.

Raley's closes seven stores

The closures are part of a Raley's regional downsizing plan that calls for seven store closings in California and Nevada — about 3% of the company's roughly 235-store footprint. Raley's said it will offer transfer opportunities to as many affected employees as possible, KSRO radio reported.

The Raley's Companies cited local market conditions and long-term financial sustainability as the reasons for the downsizing.

The West Sacramento, Calif., grocery chain began the plan with the closure of its Raley's store in Roseville, Calif., in January 2026, followed by its store in Antioch, Calif., in April; the chain had allowed both store leases to expire. It continued by shuttering a Nob Hill Foods store in Mountain View, Calif., on May 29, 2026, affecting 50 employees. Together, the Mountain View and Petaluma closures alone affect nearly 100 workers.

Underperforming store leads to closure

Raley's followed the Mountain View closure with the announcement that it 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, Chief Marketing Officer Carol Barsotti said.

The company also plans to close its Raley's store in Brentwood, Calif., on Nov. 3, 2026, and an Elko, Nev., location in December 2026, according to SFGate.

"Thoughtful stewardship sometimes means opening stores and sometimes it means making difficult decisions to close them," The Raley's Companies spokesperson Chelsea Carbahal told SFGate.

Foot traffic and sales impacted

Raley's brick-and-mortar locations have faced increased competition from online marketplaces and changing customer preferences, which have affected store foot traffic and overall sales, Carbahal said. That competitive pressure has intensified across the industry since Amazon acquired Whole Foods Market in 2017 and expanded its own online grocery operations.

Despite the downsizing plan, Raley's intends to open a new store in March 2027 in Madera, Calif., a city in the Central Valley.

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, according to the company's history. The family-owned 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 Raley's, Bel Air, Nob Hill Foods, Raley's O-N-E Market, Bashas, Bashas Dine, Food City, and Eddie's Country Store, according to its website.

Stores face revenue challenges

Grocery stores face challenges in remaining 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 do not make economic sense. Grocery retail has long operated on thin margins, leaving limited room to absorb rising costs or sustain stores that underperform.

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.

Store closings have even hit a chain that had never closed a store before. Cosentino's Food Stores, a 78-year-old grocery chain operator, 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 store.

This story was originally published by TheStreet on Aug 22, 2026, where it first appeared in the Retail section.