Posts Tagged 'Roundys'

Kroger’s to buy Roundy’s: More consolidation on the horizon?

The announced acquisition of the Roundy’s stores (Pick N’ Save, Mariano’s, Copps) is of special interest here, because Roundy’s is a hometown Milwaukee retailer. I describe it (on RetailWire) as a “tale of two companies,” including some valuable assets for the Kroger’s portfolio as well as some underperforming stores:

The success of Mariano’s certainly gives Kroger a foothold in the Chicago market, and a vehicle for brand positioning much different from Jewel or the big discounters’ grocery operations. Mariano’s may be the prize posession but is a relatively small part of Roundy’s portfolio.

Roundy’s still generates most of its sales from its mid-market Pick ‘n Save and Copps locations here in Wisconsin. These stores have steadily lost market share to Woodman’s, Walmart, Aldi, Costco and now potentially Meijer. And, frankly, Roundy’s has been slow to expand its Metro Market concept (the local version of Mariano’s) fast enough while the upscale (and locally owned) Sendik’s chain has expanded rapidly.

As a shopper at my neighborhood Metro Market and Pick ‘n Save (about five miles apart from each other), I hope Kroger management brings better operating attention to detail to the market. Long checkout lines, expired dairy, and an overabundance of private brand have not helped Roundy’s win the market share war. Meanwhile, Mr. Mariano has been more focused on his personal re-entry into Chicago, having lost his job at Dominick’s to another takeover several years ago.

Walmart’s price comparison ads: Good long-term strategy?

In today’s RetailWire discussion, panelists weigh in about whether the Walmart comparison ads running in markets across the country are working or not. While most consumers are skeptical about price comparisons, the campaign appears to be driving share for Walmart. I have mixed feelings about the long-term benefit of the tactic, although it’s certainly true to Walmart’s brand positioning:

There is a lot of “fine print” (at least in the newspaper versions of the Walmart vs. Roundys ads running in this market) that would cause skepticism about the campaign. In particular, it’s hard to tell (especially in the TV spots) whether Walmart is doing an exact comparison or cherry-picking the items on both “tape totals” to slant the outcome. If you read the disclaimers, you’ll see what I mean, but there is no doubt that the campaign is working.

There are a couple of possible responses: Publix has decided to push back on the price message, while other grocery chains try to stay “above the fray” by offering better service and more specialized content. But not responding at all is a passive (and losing) tactic.

One more issue: The price comparisons may be driving share in food and consumables but do not appear to be moving Walmart’s overall sales and margins in the right direction. The focus on the lowest-margin businesses in the store may be counterproductive in the long run.