Roundy's Supermarkets' announcement this week that it would sell 18 Rainbow Foods stores to a variety of buyers in Minneapolis drew a mixed reaction from shoppers in the Twin Cities.
The deals, which will net Roundy's $65 million plus the cost of inventories, will allow the Milwaukee-based operator to concentrate resources on its growing Mariano's brand in the Chicago market. Roundy's acknowledged that increased competition in the Minneapolis market along with a sluggish economy "has made it difficult for Roundy's to keep the Rainbow banner competitive," and said the passing the locations to local owners would "provide these stores better stewardship."
As illustrated in this SN map, the divested stores will be scattered among Supervalu and independent retailers. Lund Food Holdings, which is acquiring three stores, said it would convert two locations to the service-oriented Byerly's brand and leave one operating under the Rainbow banner.
Don't wake me from my suburban dream.. Byerly's is coming to Eden Prairie. http://t.co/nXLC1Apssf
— Amy Hockert (@AmyHockert) May 7, 2014
Supervalu in the meantime said 10 of the acquired stores would convert to the Cub banner, sparking lengthy debate among locals in social media as to the merits of the respective brands:
I can't imagine hearing more exciting news today: The gross Rainbow Foods in Uptown is becoming a Cub Foods. http://t.co/ZEWFPdEOMt
— Aaron Gleeman (@AaronGleeman) May 7, 2014
I'm weirdly bummed that my favorite Rainbow Foods, in the Quarry, is transforming into a Cub.
— Patrick Stephenson (@patiomensch) May 7, 2014
While Hy-Vee's recent announcement that it would expand into Minneapolis was likely a factor in the increasing competition referenced by Roundy's, some locals were surprised not to find it among the buyers.
Not surprised at all that Rainbow Foods is pulling out of the Twin Cities. I am surprised that none of the stores will become @HyVee.
— Danny Sussman (@TheSuss) May 7, 2014
The West Des Moines, Iowa operator was quick with a response:
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