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RAINBOW SEES SUNNY FORECAST

MINNEAPOLIS (FNS) -- Rainbow Foods, Hopkins, Minn., is eyeing growth opportunities in new areas of Minneapolis, and in Wisconsin, according to Tom Farello, president and chief executive officer.Currently, 37 of the firm's 46 stores are in the metropolitan Minneapolis-St. Paul area, where market share is 34%, up from 26% in 1997, Farello said here at the annual meeting of Fleming Cos., Oklahoma City,

MINNEAPOLIS (FNS) -- Rainbow Foods, Hopkins, Minn., is eyeing growth opportunities in new areas of Minneapolis, and in Wisconsin, according to Tom Farello, president and chief executive officer.

Currently, 37 of the firm's 46 stores are in the metropolitan Minneapolis-St. Paul area, where market share is 34%, up from 26% in 1997, Farello said here at the annual meeting of Fleming Cos., Oklahoma City, held earlier this month.

Rainbow is a unit of Fleming.

"Along with our commitment to the metro area, we see good growth opportunities in other areas of the state -- and in Wisconsin," stockholders were told. Presently, the chain has six stores in Southern Minnesota and one unit in North Central Minnesota. Rainbow opened two stores in the past week -- one in Austin and the other in St. Cloud. The company has two stores in Wisconsin.

One of this year's key merchandising strategies is to create customer value and loyalty through "aggressive and innovative" use of Rainbow's EasySave card, Farello said. The company has more than 700,000 EasySave cards in circulation today, less than nine months after launching the program.

Over 71% of all transactions are now done with the card, Farello pointed out. As part of the introductory campaign, customers got 5% off their next purchase ever time that they spent $300 with the company between Aug. 30, 1998 and Jan. 1, 1999.

Rainbow this year also will continue to market produce as a "signature" department, Farello noted. "Our goal is to strongly communicate the strength of our produce departments."

Rainbow launched in February a "Triple-Inspected Fresh" campaign which emphasizes that all perishables are checked for quality three times: At the warehouse dock on incoming shipments from growers; in the warehouse by quality control managers before it is shipped to retail stores; and at each store by the produce manager when orders are received.

The Minnesota retailer will continue to inject an element of surprise in its promotions, Farello said.

Last year, floral sales increased 37% by promoting Cupid's Day -- the day before Valentine's Day. "It's a fun way to remind customers to do something for their special someone before it's too late," the CEO pointed out.

In order for Rainbow to succeed as a "destination" supermarket, the company, according to Farello must:

Maintain perishables dominance.

Target specific groups in its marketing -- using information gathered from the loyalty card.

Lead the market in "deep basket" items -- paper products, household goods, and pet products that were lost to mass merchants and category killers.

Be the total store variety and selection leader.

Advertise items customers want most.

Create the store as a theater.

Lead the market in innovating new ideas, items and concepts.

Continue to lead in promoting family activities.

And develop and market store brands in the stores.

Earlier this year, Rainbow introduced pharmacies in eleven of its stores, "a major step for us," Farello noted. Fifteen of the units will have pharmacies by the end of the year.