To protect their long-term financial health, companies make difficult and sometimes surprising decisions. While store closings are common during economic downturns, selling underperforming stores to competitors remains one of the most unexpected strategic moves.
Grocery chains nationwide have re-evaluated their operations in recent years as inflation, changes in consumer behavior and ongoing economic uncertainty have had a significant impact on profitability. These assessments have resulted in widespread store closings and mass layoffs, leaving some communities with limited access to nearby grocery stores and essential items.
Now, another grocery chain has become the latest victim to join the growing list of retail closures.
Gelson’s Markets revealed that it will permanently close its store at 7660 El Camino Real in Carlsbad, California on February 28, 2026, according to a notice posted on its website. The closure marks the end of a decade-long presence in the community.
However, the space won’t remain vacant for long, as Gelson’s Markets has reached an agreement to sell the location to Kroger-owned Ralphs, according to a statement emailed to Grocery Dive on Dec. 29.
While financial terms of the deal have not been disclosed, the Ralphs are expected to take over ownership and operations on March 9.
The sale comes after years of financial trouble for the Carlsbad store. Despite efforts to improve performance, the location remained unprofitable.
“The store has faced financial challenges for several years and, despite ongoing efforts to improve performance, remains unprofitable. After careful consideration, we have made the difficult decision to sell the store,” Gelson’s Markets said in an emailed statement.
While some positions will be affected by the closures, the company said Kroger will retain as many employees as possible to minimize job losses.
Gelson’s Markets stressed that the closure would not impact its wider business. The company will continue to operate its remaining 27 stores in Southern California and plans to open a new 10,000-square-foot smaller store in Toluca Lake, Calif., on Jan. 28, according to a news release posted on its website.
Founded in 1951 as a regional grocery chain, Gelson’s Markets has grown into an upscale, multi-division supermarket brand with dozens of stores throughout Southern California.
The company’s roots can be traced to the Mayfair Companies, which in 1948 merged its eight California stores with 43 Van’s Markets stores under the ownership of Arden Farms Co. (now Arden Group). [ARDNA]), forming the Mayfair Markets chain.
At its peak, Mayfair operated 250 stores in Arizona, Utah, Oregon, Washington and Nevada.
More store closures:
As consumer preferences shifted, most of the Mayfair stores were sold and the remaining stores were renamed under the Gelson’s Markets name.
In 2014, private equity firm TPG acquired Gelson’s Markets to support its expansion efforts. The chain was later sold to Pan Pacific International Holdings of Japan (DQJCF).
To avoid widespread closures in Mayfair, Gelson’s Markets is focusing on store refurbishments and expanding its own-brand offerings to stay competitive, according to the history section of its website.
-
Walmart: Closing 11 underperforming stores in 5 states. (source:street)
-
Kroger: It plans to close 60 underperforming stores nationwide by the end of 2026, and 39 stores are expected to close in 2025. (source:groceries dive)
-
Parking and shopping: Close more than 30 underperforming stores in 2024 and 7 warehouses in 2025. (source:Ahold Delhayz)
-
Winn Dixie: Parent company Southeastern Grocers plans to sell 32 Winn-Dixie stores and eight Harveys supermarkets in four states before changing its name to The Winn-Dixie Company in early 2026. (source:street)
-
Land Acquisition Company: Five supermarkets owned by Homeland, United Supermarket, Piggly Wiggly and Discount Foods were closed in Oklahoma and Georgia. (source:street)
-
Price Chopper: Since 2024, it has closed multiple underperforming stores in multiple states, including a store in Gloversville, New York, in 2026. (source:street)
Economic uncertainty, changing consumer habits and ongoing trade pressure are forcing many U.S. retailers to downsize or consolidate their operations. The closures have led to a surge in layoffs at a time when inflation and rising costs are straining household finances.
According to the Challenger, Grey, and Christmas 2025 layoff announcement report, more than 1.2 million people will be laid off in 2025, a 58% increase from the previous year. The retail industry alone issued nearly 93,000 layoff announcements, an increase of 123%.
That same year, California reported the most layoffs of any state in the country, with 1,581 WARN notices issued and approximately 94,116 employees affected, according to WARN Tracker.
“The widespread closure of physical retail stores in the digital era has had a significant impact on business outcomes, urban communities and regional economies,” said industry experts at ScienceDirect. “Understanding this phenomenon is critical for retailers, policymakers and society at large.”
According to the latest employment situation report from the U.S. Bureau of Labor Statistics, 911,000 fewer jobs were created in the 12 months to March 2025 than expected, indicating a significant slowdown in economic growth.
Only 22,000 new non-farm jobs were added in August, and the unemployment rate rose to 4.3%, the highest level in the past four years.
“While the pace of layoffs has accelerated, hiring remains quite low,” Mike Fratantoni, chief economist at the Mortgage Bankers Association, said in a statement. “For those who have been laid off, as well as new entrants to the job market, it is increasingly difficult to find work.”
RELATED: Two leading grocery chains cut spending, close stores during holidays
This article was originally published by TheStreet on January 8, 2026, and first appeared in the Retail section. Click here to add TheStreet as your preferred source.