Mariano Details Roundy's Plans for Chicago

Jul 26, 2010 12:00 PM, By ELLIOT ZWIEBACH


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Robert A. Mariano is once again operating in Chicago — this time with his name on the front of the store.

Mariano's opened in the Arlington Heights neighborhood northwest of Chicago.

Having spent 28 years with Dominick's in Chicago prior to joining Milwaukee-based Roundy's as chairman, president and chief executive officer in 2002, Mariano has engineered Roundy's expansion beyond Wisconsin and Minnesota into the Windy City with the opening last week of the first Mariano's Fresh Market.

That entry has been pending for four years, while Roundy's looked for the right site, Mariano told SN.

The store — in Arlington Heights, an upper-middle-income neighborhood 25 miles northwest of Chicago — is the first of between 12 and 15 stores Roundy's hopes to open in the Chicago area over the next five years, Mariano said.

At least four more locations are set to open in the next couple of years, he noted: a two-story urban store in downtown Chicago, scheduled to open next summer (which was supposed to open in 2008 as Roundy's first Chicago store but was delayed by redevelopment issues); a unit in Vernon Hills, near Arlington Heights, in late 2011; a store on Chicago's South Side, in an underserved food desert, scheduled to open in late 2011 or early 2012; and, if financing can be arranged, he said, an 80,000-square-foot store — the largest of the group — on the Near North Side of Chicago, whose opening date is uncertain.

“This is a very dispersed market, and we need to build recognition of the brand over a wide area,” Mariano said.

Local speculation persists that, if Safeway-owned Dominick's is ever put up for sale, Roundy's might be a potential buyer.

Including the Mariano's unit, Roundy's operates 155 stores under the Pick 'n Save, Copps Food Stores and Rainbow Foods banners in Wisconsin and Minnesota. Willis Stein & Partners, a Chicago-based investment firm, owns a majority stake in Roundy's.

Roundy's home base in Milwaukee is approximately 90 miles north of Chicago, along Lake Michigan. Product that is not supplied locally to Mariano's is being shipped from the chain's distribution center and commissary in Wisconsin.

Although several out-of-town retailers have failed in the Chicago market, local observers believe Roundy's has the potential to succeed.

The most recent entrants were Minneapolis-based Byerly's, which opened two units in the area in the late 1990s that ultimately closed, reportedly because of poor real estate decisions, observers said, and a single unit of Indianapolis-based Marsh, which opened in mid-2005, and closed, reportedly because of distractions at the corporate level.

“When Eagle came into Chicago, or A&P or Kmart, it was almost amusing [to see] how much those out-of-town operators didn't understand about the brands, packaging and cuts of meat Chicago shoppers prefer,” one observer told SN. “But that won't happen with Roundy's because of the experience in Chicago of Mariano and his management team.”

Another observer told SN: “Mariano will take this move very personally, and he won't let it fail. Like a kid playing a sport with his parents watching, Bob will be showing off in front of his hometown crowd, so you know he's going to give it 110%.”

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