Roundy’s Inc. plans to drop its Rainbow banner to focus on core business and expanding its premium Mariano’s concept in Chicago.
The Milwaukee-based retailer said May 7 it has plans to sell 18 Rainbow stores in the Minneapolis-St. Paul market to a group of grocery retailers including Lund Food Holdings Inc. and Supervalu Inc. The remaining nine stores, if unsold, will close at the end of the estimated $65 million transaction.
“We entered the Twin Cities in 2003, becoming the No. 2 grocer in market share,” said chairman, president and chief executive officer Robert Mariano, during the company’s first quarter financial call May 7. “Since then the competitive landscape has changed dramatically as Target and Wal-mart have both invested significantly in the market.”
Roundy’s turned to Chicago and its new Mariano’s concept for growth. The company opened five new Mariano’s in Chicago in the first quarter, for a total of 21 in the Chicagoland area.
“Our strategy today is to focus our efforts where they will provide the most benefit for all of our stakeholders,” he said during the call. “This divestiture allows us to focus our management, capital and other resources to grow our Mariano’s business in Chicago, our growth market, and to stabilize and grow our Wisconsin market, where we have strong market shares.”
Mariano said average weekly sales for Mariano’s stores for the first quarter were approximately $1 million.
Many of the new Mariano’s are former Dominick’s locations acquired in December.
“The acquired stores have received an enthusiastic reception within their respective communities,” he said. “We remain on target to open up four of the remaining five acquired stores over the next two quarters and the fully-remodeled Westchester store later on in the year.”