OHIO and WISCONSIN- With the $866 million acquisition of Roundy’s under its belt, the supermarket giant Kroger is now looking to incorporate some new elements to its Wisconsin Pick ’n Save and Metro Market stores. At the forefront of these details are the stores’ aesthetics, product mix, and pricing.
According to Biz Times, Milwaukee Business News, Kroger is consolidating the Roundy’s brands under the Pick ’n Save and Metro Market banners. Under the acquisition, Kroger inherits 151 stores and 101 pharmacies in new regions, as we previously reported, including Milwaukee, Madison, Northern Wisconsin, under the Pick 'n Save, Copps, and Metro Market banners, plus two Wisconsin-based distribution centers.
“Usually Kroger, after they acquire a store, they integrate their own product in the store; they try to sync their frequent shopper card up with those stores,” grocery industry analyst David Livingston was quoted in the Biz Times, as saying.
James Hyland, Vice President of Corporate Communications and Public Affairs at Roundy’s, also echoed the news noting that among the changes coming down the pipeline this year are store remodels, and pricing and product shifts.
“There’s obviously going to be changes in product that people will see and there will be pricing changes and there may be some changes to the store,” said Hyland. “We have committed to increase our capital spending throughout all of our Wisconsin banners. While we don’t publicly disclose our spending plans, over time our customers will notice changes in merchandising, pricing and store aesthetics.”
Livingston noted that these benefits could trickle down to the consumer.
“It’s going to work out pretty good for the customer because it will give them a little more access to some better deals,” Livingston added.
As for employees, the integration may be a bit more up in the air.
Hyland noted that there are just more than 500 employees at the Roundy’s corporate headquarters in Milwaukee and also has a total of 23,000 employees, with 13,000 of in Wisconsin alone. While Metro Market stores may see some changes this summer, Hyland wouldn’t answer questions about any employment decisions occurring at corporate offices in Milwaukee.
“You’re asking strategic questions and we don’t reveal strategy to the media,” Hyland said. “If I’m Hy-Vee or Festival (Foods) or somebody else, I would love to know what Roundy’s is doing. Like any other industry, those are things we keep close to the vest and we have to do that for competitive reasons.”
On another note Livingston did comment that the point of acquisitions like these, is to eliminate redundancies.
“A lot of those (corporate) functions are already being done in Cincinnati and Roundy’s has a lot of good people, so it wouldn’t surprise me if they made some offers to people to move to Cincinnati,” he said.
This summer Kroger is also renaming the Copps stores to Pick ’n Save in the Fox Valley.
So what about the mix of Kroger vs. Roundy’s brand products as well as national brands? A Roundy’s manager who declined to be named told the Biz Times that the pricing department has been told to cut prices in half on some Roundy’s brand and national brand products to make room for those Kroger branded.
While there may be some product changes, Hyland said, the 120,000-square-foot commissary will remain in operation. Pick ’n Save and Metro Market stores currently carry Roundy’s brand products, which are made at the company’s commissary in Kenosha. Fresh and prepared food is supplied to 150 stores in Wisconsin and Illinois from this facility.
And, as with most price changes, the move is being motivated by the competition from retailers like Meijer and Walmart, Livingston said.
“I could see prices being lowered around 4 percent,” he said.
Livingston also added, “I think they’re going to close probably up to 20 percent (of the Roundy’s stores). They’re just too close to the other stores. It just wouldn’t make sense to keep them open.”
So, what’s next as Kroger looks to diversify across its network of banners? Stay tuned to AndNowUKnow for continued updates.
