Robert Mariano knows Chicago. In the late 1990's, he ran Dominick's Finer Foods and was there when the then market leader rolled out its "Fresh Store" concept.
It wasn't long after, however, that Safeway bought Dominick's, scrapped the "Fresh" concept and started a period where it steadily lost market share. Interestingly, Dominick's began a rebound, of sorts, in the past couple of years when it started remodeling stores under Safeway's "Lifestyle" concept. The new format, it should be pointed out, bears a number of similarities to the "Fresh Store."
Mr. Mariano, for his part, has moved on to other challenges. Specifically, he has taken the helm of Milwaukee-based Roundy's, a grocery wholesaler and operator of stores under the Copps, Pick 'n Save and Rainbow banners.
Now, Mr. Mariano is looking to return to his Chicagoland home in a big way.
Roundy's has announced plans to open its first Chicago store on the New City YMCA site at 1515 N. Halsted in the summer of 2008.
The store, according to a company press release, will be about 80,000 square-feet on two floors. It will focus on fresh offerings across the store along with a wide selection of prepared foods for all meals. Natural products and organics will have a strong presence in foods and non-foods.
Roundy's has plans to open as many as 13 new stores, as yet unnamed, in Chicagoland over the next three years, possibly including a store in the Carson Pirie Scott building on State Street. The company is reportedly looking at some of the locations being vacated by Dominick's along with others that may be more suitable to its needs.
The Chicagoland stores, according to Roundy's, will be supplied through the company's new 1.1 million square-foot distribution center in Oconomowoc, Wis.
Mitch Corwin, an analyst with Morningstar, said Mr. Mariano and Roundy's might have Chicago sized-up properly.
"For a big market, Chicago doesn't have a lot of large players," he told the Chicago Tribune. "It is unusual for a player to have more than a 40 percent market share." (Supervalu's Jewel has a 45 percent share; Dominick's has 15 percent.)
At the same time, no one should expect Mr. Mariano and company to walk in and take over the city. "Chicagoland has been traditionally brand loyal, and it will not be easy to introduce a new brand into this marketplace," said Mr. Corwin.
Bill Bishop, chairman of Willard Bishop Consulting and a RetailWire BrainTrust member, said, "There is a real evolution in what people are looking for in food stores... There could very well be an opportunity for a couple of really viable new supermarket competitors in the Chicago market."
Discussion Questions: Is Chicagoland ready for a new grocery store chain? Is Roundy's, under Robert Mariano's leadership, the right company to make a big push in the market?