Button mushrooms (Agaricus bisporus) grow in multilayered Dutch shelves with limited space between two shelves. As an alternative to conventional hand-picking, automated harvesting in recent times has gained widespread popularity. However, automated harvesting of mushrooms faces critical challenges in the form of growing environment, limited spaces, picking forces, and efficiency. End effectors for picking button mushrooms are an integral part of the automated harvesting process. The end effectors developed so far are oversized, bulky, and slow and thus are unsuitable for commercial mushroom harvesting applications. This paper introduces a novel three-finger hybrid gripper with rigid and soft parts, specifically designed for harvesting button mushrooms in automated systems even on narrow shelves. It discusses the design, fabrication, force analysis, and picking performance of the gripper in detail for both individual and clustered mushrooms. The results indicate that the gripping force depends on mushroom density and size. The inclusion of textured soft pads on gripper fingertips performs better compared with plain soft pads by reducing force by up to 20% and improving picking time. The gripper achieved a 100% picking success rate for single-grown mushrooms and 64% for clusters, with reduced picking times compared with existing end effectors. However, harvesting clustered mushrooms led to increased damage, suggesting the need for future improvements.