US grocers accelerate store closures through 2027 to protect profit margins
Major US supermarket chains including Kroger and Raley's are shuttering dozens of locations through 2027 as rising labor costs and shifting consumer habits force retailers to prioritize financial sustainability over physical footprint.
Major US supermarket chains are entering a prolonged phase of physical downsizing, with Kroger, Stop & Shop, and The Raley's Companies all confirming significant store closures extending into 2027. The retrenchment signals a broader industry shift as grocers abandon underperforming real estate to protect profitability against persistent inflation.
Cincinnati-based Kroger expects to close approximately 60 locations across its portfolio by the end of 2026, according to its first-quarter fiscal 2025 earnings call. Similarly, Giant Ahold Delhaize’s Stop & Shop confirmed in July it will shutter sites in Basking Ridge and Westfield, New Jersey, next year.
Margin protection drives consolidation
The Raley’s Companies is executing a regional consolidation plan that will eliminate seven stores across California and Nevada. "Thoughtful stewardship sometimes means opening stores and sometimes it means making difficult decisions to close them," company spokesperson Chelsea Carbahal said.
The West Sacramento-based chain initiated the plan by allowing leases to expire in Roseville and Antioch, California, in early 2026. Subsequent closures include a Nob Hill Foods location in Mountain View affecting 50 workers in May, and a Brentwood store scheduled to shut in November.
Further reductions will hit an Elko, Nevada, site in December 2026, a Petaluma, California, store in January 2027 affecting 48 jobs, and a Los Gatos location in June 2027. Chief Marketing Officer Carol Barsotti noted the Los Gatos closure follows a review of store performance and current economic conditions.
Raley's stated it will offer transfer opportunities to as many affected employees as possible. The company cited local market conditions and long-term financial sustainability as the primary drivers for the regional downsizing plan.
Brick-and-mortar grocers face compounding pressures from regional and national competitors, alongside online marketplaces capturing shifting consumer preferences. These structural headwinds have depressed foot traffic and overall sales, forcing operators to evaluate lease rates that no longer make economic sense.
Rising costs for both products and labor driven by inflation further squeeze traditional supermarket margins. Despite the widespread contraction, the sector is not uniformly retreating from physical expansion.
Raley's plans to open a new location in the Central Valley city of Madera, California, in March 2027. This targeted addition highlights how operators are carefully allocating capital to new formats even while shedding legacy footprints.
