Roundy’s CEO Lets Chicago Know He’s Back
Roundy’s CEO Robert Mariano knows Chicago. Back in the 1990s, he ran the
Dominick’s chain so well that Safeway thought it was worth buying. A few
years back when Roundy’s announced it would open its first stores in the
Chicagoland market, Mr. Mariano bragged his company of "entrepreneurs and merchants" would
achieve success against the plain vanilla competition.
Mr. Mariano is a confident man as Roundy’s is finally getting around to opening
its first stores in the Chicago area. He’s so confident, in fact, that his
name will be on the banner.
Mariano’s Fresh Market, opening for business in
Arlington Heights and Lakeshore East, "will reflect old-world adherence
to quality and personal service, blended with Mariano’s signature approach
to supermarket innovation," according
to a Roundy’s press release.
The store will focus on fresh and prepared foods in a full-service shopping
environment. Mr. Mariano promised the stores would deliver "the aisle by aisle selection
and the value every shopper deserves."
The Lakeshore East store will be the first full-service grocery store to open
in Chicago’s downtown in many years, according to Roundy’s. The store is part
of a new condo development on East Randolph Street.
Mr. Mariano promised that all stores Roundy’s opens will take a local approach.
"We
want our customers to know that Mariano’s Fresh Market intends to be fully
immersed in the fabric of our communities. We take this responsibility very
seriously and are already developing plans to activate our long term dedication
to the neighborhoods we will serve," he said.
Discussion Questions: What do you think of Roundy’s chances in the Chicagoland
market? Is naming its stores after the company CEO going to have an appreciable
effect (positive or negative) on consumer perception of the new grocer
in town?
I personally believe that Mariano will be successful here in Chicago. The Dominick’s stores were so well run in the late 1990’s with very innovative design and well thought out IT infrastructure.
I do hope that these stores are a little more innovative than what I observed at Pick ‘n Save and Rainbow. Would you believe that Roundy’s installs high tech phone systems and then a separate Aiphone intercom system for in store communications? I know. Who cares? But when you look at retailers such as Wal-Mart, Meijer, Safeway, Jewel, Walgreens, etc., 99% of retailers use their expensive Nortel, Cisco, Avaya, or Toshiba phone system for internal intercom calls, paging announcements and external phone lines, not two separate systems. I hope you get it right like you did at the Dominick’s stores Bob with your ROLM and Meridian One systems. It looks rather outdated and ridiculous when you put 2 phone handsets next to each other on the Deli Department wall.
In general though, I believe Bob will be successful because he knows the kind of lunch meats Chicagoans eat for lunch, he knows the type of beer we want to drink, he knows the type of tortilla chips we like. I could go on and on. If he can run a store like hometown hero Strack and Van Til, he will have won half the battle. Strack and Van Til offers to carry out your groceries for you at their Elston store in Chicago, a tradition started at their local Northwestern Indiana stores since the 1940’s.
Another thing Bob will have to be successful with is in-store food service. I remember the cafe areas of the Dominick’s stores in the mid 1990’s had everything from pasta to BBQ ribs to Chicago style hot dogs, all ready to take home for dinner at night or to eat right at the nice cafe in the store. Safeway killed this concept almost immediately. As I recall, the Bannockburn Dominick’s was doing quite well in the food cafe area. We used to go there at lunch at least once a week and the place was packed. Now it’s been remodeled into a little Starbucks cafe with barely any seating.
Good luck Bob. I can’t wait to see your newest store!
Roundy’s will most likely be sold in the near future and I would guess that Bob will just break off from Roundy’s and run his own store in Chicago. I’m thinking he will take his share of dividends and proceeds to finance his own venture. Roundy’s has been dragging their feet for years with their push into Chicago. There has been no rush. With their sub par credit rating, its difficult for developers to get loans if Roundy’s is on the lease.
So I see Bob going it on his on. He has an experienced crew and they know the market. I’m not so sure he is that well known in Chicago, but he thinks he is and that’s whats important. This first store will be a grand experiment and I wish him luck. I think he would prefer just to humiliate Dominick’s by buying them back for pennies on the dollar compared to what he sold them for in 1998. He’s probably got a better shot at reviving the Dominick’s banner, rather than using his own name.
Roundy’s is the market-share leader here in Milwaukee, operating most of its local stores under the Pick ‘n Save banner. It’s experimenting with new concepts (such as Metro Market) in more upscale neighborhoods and urban locations where it competes against the fast-growing Sendik’s chain. Mr. Mariano has not been shy about being the “face” of Pick ‘n Save on its shopping bags, TV commercials, private brands (“Chairman’s Choice”) and so on.
I assume Roundy’s has done the research needed to prove that “Mariano’s Fresh Market” will resonate in the Chicagoland area. (On paper, it sounds like an ego boost.) I also hope that Roundy’s brings a consistent level of execution to its expansion efforts … something not always visible at local Pick ‘n Save stores in terms of restocking shelves, checkout convenience, and so on.
Chicago, or at least parts of it, are ready to accept a “new” mousetrap and Mariano is a respected name encased in that purpose. The two locations are well situated and the prognosis looms favorable for the return of the Dominick Kid.
MFM will only serve a small “niche” market, mostly the single, downtown workers. If Mariano is content to live there, then the store will be successful. However if he attempts to expand based on the success of two stores, I think he will be in for a shock. Chicagoans really don’t go for much in the way of change. Why else would Dominick’s and Jewel still be the greater percent of the market’s ACV?
Having lived in Chicago when Mariano was running Dominick’s prior to the Safeway sale, I believe he will be very successful. Bob Mariano has a strong intuitive sense of what people want and what makes a supermarket successful. He knows his market, and caters to that segment. Mariano markets to foodies. He doesn’t market to the traditional family on a budget looking for mac and cheese in boxes.
The only question in my mind is the timing. With the economy down, retailers struggling, reducing prices and closing altogether, is this the right time? Retail is at a 25 year low in Chicago. Time will tell. If Mariano takes business from anyone, it’s more likely to be from Fox & Obel, Whole Foods or Trader Joe’s. In any case, I wish him the best of luck and welcome him back to Chicago.
I think Roundy’s will soon be an afterthought to Bob as he begins his love affair with his new store. I’d be willing to bet in a short period of time, Bob will be spending 99% of his time devoted to this one store. He won’t let it fail.
Both Dominick’s (Safeway) and Jewel (Albertson’s, then Supervalu) are but a shell of their former selves when it comes to customer loyalty, stock management, and service. Having just returned from an afternoon of stock-up shopping for Easter entertaining at both chains, I think Bob’s got a good chance to succeed here and I hope he does.