Roundy's Tests Service Initiative at Pick ’n Save

MILWAUKEE, Wis. — Roundy's [4] here said Thursday it is testing pricing and service initiatives in place at its upscale Mariano's stores in Chicago at 14 Pick 'n Save stores in this market.

"The preliminary feedback has been positive," Robert A. Mariano, president and chief executive officer, told financial analysts during a conference call Thursday, "and we are pleased with our results to date.

"We began this work in the third quarter, and we continue to work on and develop these initiatives to identify the right levers to ensure we are delivering the best overall value and experience to our customers. We're in the very early stages of analyzing the data, and we will roll out these initiatives to additional stores when we are fully satisfied with the performance at the test stores.

"This will be an ongoing, multi-year process, as great service and fair pricing are perpetual, not finite."

Roundy's is not communicating the changes to customers at the test stores, Mariano said.  

"We've done a fair amount of consumer research, and we know the customer sees what we're doing from the transaction count.  But we've decided this is not the appropriate time to start telling the customer [about the changes] in a forceful way because we have other things we want to get done to make sure we can support the claims we make."

For the fourth quarter that ended Dec. 29, the company reported a loss of $98.4 million — including an after-tax goodwill impairment charge of $106 million and a non-recurring after-tax pension withdrawal charge of $608,000 — compared with net income of $9.2 million a year ago; excluding those charges, adjusted net income was down 5.7% to $8.6 million.  Sales for the quarter rose 1.4% to $981.9 million, while comparable store sales fell 2.1%.  

Read more: Roundy's Sees ROI in Price Optimization [5]

For the year the loss was $69.3 million — reflecting the goodwill impairment charge and the pension withdrawal charge; an $8-million charge for early extinguishment of debt; one-time IPO expenses of $314,000; and other non-recurring after-tax charges of $840,000  — compared with net income of $48 million a year ago; excluding those charges, adjusted net income dropped 2.3% to $47 million.

Sales for the year rose 1.3% to $3.9 billion, while comps declined 2.8%, reflecting a 2.6% decrease in customer counts and a 0.1% decrease in the average transaction.

For 2013 the company said it expects adjusted diluted earnings of 88 cents to $1 per share; sales growth in the range of 3% to 4%; and comps in the range of negative 1.5% to negative 0.5%.

Roundy's, which operates eight Mariano's stores, plans to open five more this year, including one scheduled to open Tuesday in Frankfurt, Ill., with the others spaced evenly throughout the year, Mariano said.

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