Why Are Gelson's Groceries So Expensive?

Upscale supermarket chain Gelson's makes for a luxurious grocery shopping experience. Founded in 1951 by brothers Eugene and Bernie Gelson (per Gelson's), the posh grocery store is dedicated to all things elegant. While they hold an excellent customer satisfaction rate of 87 out of 100, GOBankingRates reports that the West Coast franchise comes up short on price competitiveness, with a disappointing score of one out of five. For example, Zippia reports that the average cost of a carton of eggs is $1.83, but the cheapest price for a dozen eggs at Gelson's goes for $6.99 — nearly $5 more than the national average (per Gelson's).

As the ongoing inflation crisis increases national food insecurity, paying nearly $7 for a carton of eggs is an irrational price for many Americans. Yet despite inflation, Gelson's actually increased its profits in the second quarter of 2022 (via Zoom Info). As it turns out, the market relies on the loyalty of their wealthier customers to skirt the impacts of economic downturn, thanks to consumer demand for comfortable shopping.

Stepping into a Gelson's is like stepping into an immersive, albeit expensive, experience. In addition to its celebrated meat department (via Supermarket News), the market's ultra-modern design boasts glass storefronts, purified air filtration, and wide isles filled with certified organic ingredients from its deli to its produce section (per Gelson's). With stores located primarily in affluent neighborhoods like the Palisades, the chain can jack its prices up to match the average income of the area and reduce overall crowding in the store, making for a far less stressful shopping experience. The chain also prides itself on selling "high quality" products (via Gelson's website), which means consumers pay for quality.

Unfortunately, Gelson's is unlikely to lower store prices seeing that its business model has proved successful since its inception. The same way grocery stores like Aldi and Key Foods cater to lower-income families and individuals, Gelson's caters to those with higher incomes. While it's not as outrageously priced as Erewhon, if you're trying to save money, Gelson's may not be your best option if you're looking to pinch those pennies.