They were orphans of a deal in which parent company Roundy’s sold off its other Twin Cities locations.
Nine Rainbow stores will go dark across the Twin Cities suburbs on Tuesday as former parent company Roundy’s pulls up stakes from the metro area.
Employees at the stores were told of the closings two weeks ago, and at many stores the shelves are mostly empty.
“We’re pretty much bare to the walls,” said Cottage Grove store manager Greg Kennedy, who predicted there “won’t be much product left” when he locks the doors around noon.
The suburban stores were orphans in a $65 million deal announced in May in which a consortium of Twin Cities grocers purchased 18 Rainbow stores.
Milwaukee-based Roundy’s said at the time that it was “actively seeking additional buyers … and at the conclusion of that process expects to either sell or close those remaining stores and fully exit the Minneapolis/St. Paul market.”
The transition has been occurring swiftly in recent weeks. Supervalu, which led the purchasing group, is converting 10 stores to its Cub Foods brand. Two were purchased by Lunds Food Holdings and now carry the Byerly’s name. Another six are keeping the Rainbow name under different ownership.
Other members of the consortium are Jerry’s Enterprises, Haug Enterprises and Radermacher Enterprises.
The Twin Cities grocery market has become hotly contested, with low-priced operators such as Target and Wal-Mart gaining ground during the recession, and national chains such as Trader Joe’s and Whole Foods making inroads. Des Moines-based Hy-Vee said in February that it will move into the Twin Cities.
Commercial retail analysts have said that some of the nine sites not included in the Roundy’s sale are in areas with a strong retail core, making them candidates for “non-grocery” options.
Rainbow has historically been No. 2 in the Twin Cities, after Cub, but it slipped to fourth in recent years and has closed five Twin Cities stores in the past 16 months.
As recently as February, Roundy’s executives said they were committed to staying in the Twin Cities. But in May, when the company announced plans to exit the market, CEO Robert Mariano said in a statement that the economic downturn of the past few years, coupled with increased competition, “has made it difficult for Roundy’s to keep the Rainbow banner competitive.”
The company also has been working to protect its flank in Wisconsin and to push a new grocery concept in Chicago.
Roundy’s owns the market-leading Pick ’n Save chain in Milwaukee, a traditional banner that, like Cub and Rainbow, has been under pressure from lower-priced operators. Roundy’s also has been expanding in Chicago, where it introduced Mariano’s, a more upscale supermarket chain like Byerly’s.
Jackie Crosby • 612-673-7335