Key development: Completing Roundy's transformation from a wholesaler to a self-distributing retailer.
What's next: Expansion in core markets of Minnesota and Wisconsin.
Robert A. Mariano finishes what he starts.
When he came to Roundy's three years ago, his mission was to turn the longtime wholesaler into a retail-focused operation. The Milwaukee-based company accomplished that transformation earlier this year and marked the change by renaming itself Roundy's Supermarkets.
"That was the goal from the beginning," Mariano told SN, "though it probably happened a little quicker than we had anticipated because of market conditions. For example, we didn't predict the demise of Fleming [which facilitated Roundy's acquisition of 31 Rainbow Food Stores in Wisconsin] or that A&P would leave the Wisconsin market [enabling Roundy's to acquire seven former Kohl's stores there]."
Both developments helped boost Roundy's corporate store count to 100, encompassing 42 Pick 'n Saves, 32 Rainbows and 26 Copp's, accounting for 85% of its $4.8 billion sales in 2004; the other 15% comes from its wholesale division, which services 25 independently owned Pick 'n Save locations, Mariano said.
A year ago, 61% of the company's sales came from retail and 39% from wholesale.
Roundy's intends to continue to grow organically, Mariano said, while also looking for acquisition opportunities within its Minnesota-Wisconsin base -- belying intense industry speculation the company is interested in moving into Chicago by acquiring Dominick's Supermarkets, the chain Mariano once ran as president and chief executive officer before it was sold to Safeway in 1998.
Bill Bishop, principal at Willard Bishop Consulting, Barrington, Ill., said a move by Roundy's into the Chicago market would be a logical step, given Mariano's extensive experience there. "He has the experience to do it, and Roundy's is well financed, so it would have the capital to do it," Bishop told SN.
On the agenda for Roundy's this year, Mariano said, is the opening of its second ground-up Rainbow store, scheduled for August in Lakeville, Minn. -- following the opening earlier this year of a new Rainbow in Shokopee, Minn. The company also plans to open two replacement units of Pick 'n Save in South Milwaukee and Oconomowoc, Wis., and a replacement for a Copp's in Middleton, Wis., he said.
Acknowledging that the Roundy's private-label lines have been underdeveloped in the past, Mariano said the company is in the midst of an aggressive rollout of approximately 100 new items this year -- "not just line extensions but new categories, including beverages and salty snacks that we introduced earlier this summer," he said.
He said he also anticipates introduction of a premium line, under the Roundy's Select label, later in the year.
Bishop believes Mariano has done a masterful job.
"Bob is playing a very good game," Bishop told SN. "He's been very clear and very focused from the beginning, and he's brought in outstanding people to execute the plan, and you can't ask for more than that from a retail executive.
"At store level he's pursued a systematic approach to improving operations," Bishop added, "and from his years at Dominick's he knows how to get at the heart and core of a retail store."
