MILWAUKEE -- Roundy's here said it is positioning itself to grow its retail operations in the Upper Midwest -- a positioning some industry observers believe may signal the distributor's interest in trying to acquire Chicago-based Dominick's from Safeway.
Speaking with financial analysts in a conference call to discuss results for the year and fourth quarter ended Jan. 1, Robert A. Mariano, chairman, president and chief executive officer of Roundy's, said the company's new 1.1-million-square-foot distribution center in Oconomowoc, Wis., which opened during the fourth quarter, should be fully operational in April. "That will position the company to grow its retail operations in the Upper Midwest," he said.
An analyst asked if the Upper Midwest included Chicago, and after a brief hesitation, Mariano said it does.
Contacted by SN after the call, Mariano declined comment on whether Roundy's is interested in bidding for Dominick's.
Industry speculation has been "swirling," one analyst told SN after the call, that Roundy's might use the net proceeds of approximately $170 million from the sale of two distribution centers to Nash Finch last month to make a bid for Dominick's. The analyst said Dominick's price could be $300 million to $325 million.
Safeway, which put Dominick's up for sale two years ago when it was unable to reach an agreement on a new labor contract, subsequently took the stores off the market.
Roundy's sales for the year rose 10% to $4.8 billion, which the company attributed to the acquisition of 62 stores, with net income rising 10.9% to $60.6 million. For the quarter, sales fell 9% to $1.2 billion. Net income rose 41.5% to $16.7 million. The prior-year quarter and year included an extra week.
Same-store sales in the retail division rose 1.6% for the year and fell 0.6% for the quarter -- a decline the company said was due to strong results in the prior year. Mariano said retail sales accounted for 68% of Roundy's total volume, compared with 59% a year ago.
