As Roundy's Inc. (RNDY) continues to focus on its better-performing Mariano stores in and around Chicago, sources anticipate the Milwaukee-based supermarket chain is preparing to exit its more than 100 stores in Wisconsin.
All of Roundy's stores north of the Illinois state line, except its handful of Metro Market banners, are effectively up for a sale, according to DJL Research supermarket consultant and analyst, David Livingston..
"They're not getting anywhere in Wisconsin," said Livingston, who expects the company will get rid of stores on a piecemeal basis, unloading a handful every few months or so. "Same-store sales continue to plummet. There's tons of new competitors. Everybody's looking at them."
Other analysts feel location is a big factor in Roundy's plans, but aren't as sure about the Wisconsin assets being the target.
"Roundy's has been in more of a consolidating mode of evaluating store profitability based on where they are located," added Moody's Investors Service Inc. senior analyst Mickey Chadha in a phone interview. "Obviously I think there are going to be more closures, but it depends on how many to [achieve] the optimum level store base."
Roundy's currently operates 91 Pick 'n Save stores, 25 Copps stores and four Metro Market stores throughout Wisconsin, according to its website.
As the Midwest supermarket chain shifts its strategy, it has been injecting millions of dollars into its newer, high-growth concept, Mariano's, which is more comparable to the likes of Whole Foods Market Inc. (WFM) . The Pick 'n Save and Copps banners, meanwhile, are more conventional and dependent on a promotional strategy and have been struggling to compete against competitors.