Back in 2003, Roundy’s Supermarkets purchased the Rainbow Foods supermarket chain as more of an investment than long-term strategic plan. At the time, Rainbow had a 21% market share of the grocery market (fiscal 2002) in the Minneapolis metro area. Amazingly, Walmart only had one store there. Fast forward nearly 12 years later, and the marketplace has drastically changed.
Roundy’s is closing two more Rainbow stores in the Minneapolis metro core-based statistical area (CBSA) because of competitive factors and changing consumer behavior, bringing the number of stores closed in the past year to five. Much of Rainbow’s problems have stemmed from Walmart’s intense growth, which now has 28 area supercenters. The metro is also Target’s hometown; it has considerably increased its grocery business with SuperTargets and the PFresh store concept. In addition, traditional supermarket operator Cub Foods still has a strong presence in the area. Higher-end shoppers are choosing Lunds, Kowalski’s, Whole Foods and Trader Joe’s, while value shoppers are opting for the aforementioned Walmart, Target as well membership clubs Costco and Sam’s. While Roundy’s hasn’t openly admitted to it, most of the company’s strategic focus has been in the Chicago area where it is growing the new Mariano’s Fresh Market concept.
Roundy’s has attempted to sell the Rainbow Foods chain in the past; still unable to find a buyer, it has been closing stores when leases expire. Currently, the chain is down to 27 locations, all in the Minneapolis metro. Chain Store Guide has been tracking grocery market share data for over a decade. Rainbow has seen years of declining market share, and it is projected to decline again after the five recent store closings.
MINNEAPOLIS-ST. PAUL-BLOOMINGTON, MN-WI*
Metro CBSA
| Parent Name | Trade Name(s) |
Current Area Stores |
Projected 2013 Share |
2012 Share |
| Walmart Stores Inc. | Walmart Supercenter |
28 |
18.1% |
17.20% |
| Target Corporation | SuperTarget; Target (PFresh) |
56 |
10.2% |
10.00% |
| Costco Wholesale Corp. | Costco Wholesale |
6 |
10.0% |
10.10% |
| SUPERVALU Inc. | Cub Foods |
52 |
9.3% |
9.20% |
| Roundy’s Supermarkets Inc. | Rainbow Foods |
27 |
9.2% |
12.30% |
| Lund Food Holdings Inc. | Byerly’s; Lunds |
21 |
9.0% |
8.30% |
| Sam’s Club | Sam’s Club |
9 |
8.3% |
8.40% |
| Whole Foods Market Inc. | Whole Foods Market |
6 |
3.9% |
2.30% |
| Aldi Inc. | Aldi |
27 |
3.5% |
2.70% |
| Trader Joe’s Co. | Trader Joe’s |
6 |
3.0% |
2.60% |
| Kowalski’s Companies Inc. | Kowalski’s Market |
9 |
3.0% |
2.40% |
| Coborn’s Inc. | Cash Wise Foods; Coborn’s; Coborn’s Superstore |
11 |
2.0% |
2.20% |
| Knowlan’s Super Markets Inc. | Festival Foods; Knowlan’s Food Market |
9 |
2.0% |
1.90% |
| Jerry’s Enterprises Inc. | Country Market; Cub Foods; Jerry’s Foods |
5 |
1.7% |
1.80% |
| The Marketplace | Cub Foods; The Marketplace |
4 |
0.9% |
0.90% |
| Nash Finch Company | Econofoods; Family Fresh Market |
6 |
0.9% |
0.90% |
| J & L Enterprises Inc. | Cooper’s County Market;SuperValu |
3 |
0.5% |
0.60% |
| Family Dollar Stores Inc. | Family Dollar |
38 |
0.5% |
0.50% |
| County Market | County Market |
2 |
0.5% |
0.40% |
| Other operations |
115 |
3.5% |
4.60% |
*Source: Chain Store Guide. Fiscal 2013 market share based on CSG projections.
