Kroger Buys Mariano's? (Hope: 2015, buyer, price)

[iidreamtheaterii]

Not sure how I feel about this. Mariano's is a fantastic store that I rate higher than Whole Foods in overall experience. Working near one of each in the West Loop, I'll always head to Mariano's before Whole Foods.

Mariano's always expressed not entering the NWI market, needing to focus on taking over all of the Dominic's first. With this "merger," does anyone see a possibility of expanding the Mariano's stores given the financial backing of Kroger?

The ARTICLE here describes Mariano's not making a profit since 2013. I can see that being the case considering how many stores needed to open, but maybe it's just Bob's way of saying "I built a great experience, now it's time to finally retire" even though he doesn't plan on going anywhere.

Any speculation?

[chet everett]

The lack of a profit is pretty much a result of INVESTING in new stores. The strategy that Bob Mariano had back when he was running Dominicks Fresh Stores was very much based on having stores that would get MUCH HIGHER MARGINS by focusing on things like ready-to-eat food to take home. It is a sound strategy. Instead selling a tray of chicken in the butcher section for a buck you roast the thing or baste the parts in hot wing sauce and sell it for 4x+ the profit. This strategy seems a good way to fit off the low cost sellers, including places like Aldi/ Trader Joes and the warehouse clubs like Costco & Sams Club. By also having a very large selection of "specialty" foods and fancy wines it also draws in people that might prefer a fancy experience compared to Target, Meijer or WalMart that have the "one stop" selling strategy.

The question of how to both grow "top line" numbers by capturing MORE grocery dollars from more customers AND increasing the overall profitably / return on investment really hinges on LOCATION and if there are spots in NWI that make sense from a demographics and distribution reach perspection it is not far fetched that this INVESTMENT from Kroger will help Mariano expand into nicer parts of NWI and probably open some fancier stores in well off parts of Wisconsin too.

Whole Foods has a very costly network of "national" distribution for its products and not many "value priced" option. The scale that Roundy's has, especially in a big meat / dairy area like Wisconsin, combined with the network that Kroger already has should make it easier for Mariano's to beat Whole Foods on both VALUE and selection.

[richb]

Two things.

The deeper pockets of Kroger make it more likely there will be NW Indiana stores sooner (or at all). That could be the good news.

However, if it gets micromanaged and mismanaged like Dominick's was when it got bought out, it won't matter as it will be generic (like Jewel has become)and pointless. And likely out of business or rebranded as one of Kroger's other brands.

Hopefully Kroger will be a better buyer of Mariano's then Safeway was of Dominick's. Kroger runs Food for Less, and that chain has been a mixed bag. So its hard to tell.

[chet everett]

The press announcement and interviews all make it clear that Kroger likes what Bob Mariano is doing and they are going to allow him to run Roundys and Mariano as a division that is not "one size fits all" the way that Safeway tried to mangle Dominicks. The evidence of just how badly Safeway did is fresh enough in the minds of anyone that is involved in the grocery business that Kroger is unlikely to make a similar mistake...

Forbes Welcome