The shifting sands of customer demographics and big box competitors has Roundy’s Inc., adjusting its banner mix regionally, closing some Rainbow stores in the Twin Cities and opening new Mariano’s stores in the Chicago market.
“We studied all our options and although we implemented a number of initiatives to offset decreased sales in these stores, our efforts did not bring about the results we needed to meet our business goals and therefore the difficult decision was made to close certain of our Rainbow stores in the Minneapolis-St. Paul area over the last year,” said Jim Hyland, Roundy’s vice president for investor relations and corporate communications.
Financial analyst Scott Mushkin of Wolfe Research in New York City described the Mariano’s stores as higher-end grocery retailers in the Minneapolis Star Tribune, saying “Mariano’s is kind of an updated version of what the best supermarket should look like.”
Hyland said in the produce aisle, the main differences between Mariano’s and the other core market banners owned by Roundy’s are wider varieties of organic produce, fresh juices and brands.
“Overall I would say there is about 10% more variety in the produce offerings at Mariano’s stores,” Hyland said.
Rainbow was once the No. 2 retail chain in the Twin Cities, but has slipped to fourth, according to the Minneapolis Star Tribune. The newspaper also reported the chain has targeted 15% of the Rainbow stores there for closing.
Hyland did not discuss specific numbers related to store closings, but did say Roundy’s plans to have 29 Mariano’s stores open in the Chicago area by the end of 2014. He said the 15 Mariano’s stores now open in the area are part of a strategy Roundy’s initiated four years ago.
“The market demographics — third largest metropolitan market in the U.S. — and competitive landscape make the Chicagoland market ideal for Mariano’s continued growth,” Hyland said. “We believe the Chicagoland market will support 45 to 50 Mariano’s stores.”
Some of the new Chicago area Mariano’s stores will be located in former Dominick’s stores. Roundy’s bought 11 closed Dominick’s stores in the area on Feb. 18. Late last year Dominick’s parent company, Safeway, decided to pull out of the Chicago area.