Kroger to buy Roundy's for $800 million

[Andrew T.]

I live in Madison. Copps is close by, it's predictable, but it's seldom my first place for groceries. After Hy-Vee opened two stores in convenient driving distance, I rarely had a reason to go to Copps again.

But recently, I stepped inside the local Copps (a former A&P-built Kohl's store) for the first time in months to see what was going on. And lo and behold, changes were afoot!

* The thing I noticed was that the suspended light fixtures and aisle signs had been lowered closer to the floor. Maybe this was Kroger's attempt at creating an "upscale" ambiance on the cheap, but I was thoroughly unimpressed. The aisle signs were so low that I could touch them (and change them, if I was feeling malicious). Combined with the aisle-length lights inches above my head, the combined effect made the aisles feel boxed-in and oppresively claustrophobic.

* Notes about remodeling were posted.

* Some aisles had been rearranged or moved.

* The merchandise mix wasn't radically different from what it had been before, but there was evidence of change. Several shelves' worth of food items were discontinued, and they were rounded up in one aisle and marked down for quick sale. (I couldn't have found a better time to stock up on canned sweet potatoes if I tried.)

* Kroger brands are starting to creep in. Simple Truth organic products were prominent all over the store, with the Kroger name printed on the back. Roundy's-brand soda pop was gone, replaced by Kroger's Big K brand both on the shelves and in the vending machine near the front of the store.

* Most store-brand products still retain the Roundy's brand, still with a Milwaukee address on the back, but the packaging was being redesigned with both old- and new-look products on the shelves. I suspect that this coincides with a switch to Kroger's factories and suppliers as well...which would be a good thing. The Kroger brand is usually pretty decent; old Roundy's products were hit and miss.

* Staffing was a little heavier than I remember it being in the past, and the employees seemed to be in better spirits. Always a good sign.

* No changes yet in wall decor. (Anything would be better than the prevailing Roundy's trend of plain beige walls emblazoned with irrelevant quotes.)

The overall conclusion? One bad change, some neutral changes, and some good changes. On the balance, it was a better experience than I remember Copps being before. But is it enough to make me become a regular shopper there? I don't know.

Now the question is, will Copps start accepting my Kroger card for sale discounts so that I don't have to pray for my scuffed-up, worn-out Roundy's Fresh Perks card to work at the scanner any more?

[storewanderer]

I don't think light fixtures and such closer to the floor is a Kroger thing. Has anyone else seen that?

To compete against Hy Vee their only hope is to have lower center store pricing and better produce. Those are the only areas of weakness I see with Hy Vee. Hy Vee is so strong on prepared foods, bakery, overall variety of product, and service levels that really competing will not be so easy. Gerbes vs. Hy-Vee in Columbia, MO was not pretty. But Gerbes did have lower prices, along with terrible perimeters and hardly any customers. I'm surprised any Gerbes are even open. In Topeka, KS when Hy Vee showed up, Dillons did some major expansions to their stores and actually compete fairly well there.

[veteran+]

I live in Madison. Copps is close by, it's predictable, but it's seldom my first place for groceries. After Hy-Vee opened two stores in convenient driving distance, I rarely had a reason to go to Copps again.

But recently, I stepped inside the local Copps (a former A&P-built Kohl's store) for the first time in months to see what was going on. And lo and behold, changes were afoot!

* The thing I noticed was that the suspended light fixtures and aisle signs had been lowered closer to the floor. Maybe this was Kroger's attempt at creating an "upscale" ambiance on the cheap, but I was thoroughly unimpressed. The aisle signs were so low that I could touch them (and change them, if I was feeling malicious). Combined with the aisle-length lights inches above my head, the combined effect made the aisles feel boxed-in and oppresively claustrophobic.

* Notes about remodeling were posted.

* Some aisles had been rearranged or moved.

* The merchandise mix wasn't radically different from what it had been before, but there was evidence of change. Several shelves' worth of food items were discontinued, and they were rounded up in one aisle and marked down for quick sale. (I couldn't have found a better time to stock up on canned sweet potatoes if I tried.)

* Kroger brands are starting to creep in. Simple Truth organic products were prominent all over the store, with the Kroger name printed on the back. Roundy's-brand soda pop was gone, replaced by Kroger's Big K brand both on the shelves and in the vending machine near the front of the store.

* Most store-brand products still retain the Roundy's brand, still with a Milwaukee address on the back, but the packaging was being redesigned with both old- and new-look products on the shelves. I suspect that this coincides with a switch to Kroger's factories and suppliers as well...which would be a good thing. The Kroger brand is usually pretty decent; old Roundy's products were hit and miss.

* Staffing was a little heavier than I remember it being in the past, and the employees seemed to be in better spirits. Always a good sign.




* No changes yet in wall decor. (Anything would be better than the prevailing Roundy's trend of plain beige walls emblazoned with irrelevant quotes.)

The overall conclusion? One bad change, some neutral changes, and some good changes. On the balance, it was a better experience than I remember Copps being before. But is it enough to make me become a regular shopper there? I don't know.

Now the question is, will Copps start accepting my Kroger card for sale discounts so that I don't have to pray for my scuffed-up, worn-out Roundy's Fresh Perks card to work at the scanner any more?

Again Andrew, I have to tell you, your posts are always so easy to read.

Cogent, organized, topic separation, conclusions, etc. Very easy for the eye to read (no huge paragraphs)

Thanks !

[Andrew T.]

I don't think light fixtures and such closer to the floor is a Kroger thing. Has anyone else seen that?

As far as I can tell these are the same fixtures that have been in the building since A&P opened it up as a Kohl's supermarket in the 1990s, so this may just be a one-off change for this particular store until more meaningful remodeling is done.

Copps is ripe for some remodels. Most of their stores in Madison are older than those of the competition, and about half of them were inherited from Kohl's in 2003. As long as they don't bungle the arch-roof store on Park Street, I'll be happy.

To compete against Hy Vee their only hope is to have lower center store pricing and better produce. Those are the only areas of weakness I see with Hy Vee. Hy Vee is so strong on prepared foods, bakery, overall variety of product, and service levels that really competing will not be so easy. Gerbes vs. Hy-Vee in Columbia, MO was not pretty. But Gerbes did have lower prices, along with terrible perimeters and hardly any customers. I'm surprised any Gerbes are even open. In Topeka, KS when Hy Vee showed up, Dillons did some major expansions to their stores and actually compete fairly well there.

Madison is the only Wisconsin market that Hy-Vee has unleashed its guns on so far, but it could be worth keeping an eye on as Roundy's canary in a coalmine. Roundy's/Copps has the advantage in store count and inertia, but not much else.

Again Andrew, I have to tell you, your posts are always so easy to read.

Cogent, organized, topic separation, conclusions, etc. Very easy for the eye to read (no huge paragraphs)

Thanks !

Well, I try.

[Andrew T.]

I can think of one more positive change that Kroger has made: Having less of a dependency on store coupons.

Until this year, Copps and Pick 'n Save were continuously littering my mailbox with direct-mail books of store coupons. They were an utter pestilence: You needed to have coupon book if you wanted to receive the advertised specials on anything, they were a complete hassle to comb through and cut out (or crudely tear out), and they were a complete hassle at the checkout register. And why bother, when I can go to Hy-Vee or Woodman's and avoid the pain?

[Andrew T.]

Today I ventured into a different Copps from the usual: This store was on Whitney Way, and is one of the few in Madison that was built as a Copps from the outset instead of being a Kohl's conversion. It hails from the early 1990s, it directly faces a newer Hy-Vee store, and it always feels like a ghost town inside.

No changes had been made overhead: The aisle signs were still sky-high. The fluorescent light fixtures were recessed within the ceiling and couldn't be lowered if they tried. No aisles had been rearranged. No grocery items had been marked down so others could be brought in.

In fact, nothing had been done at all. Aside from Simple Truth and Big K products on the shelves, the store was exactly the same now as it was pre-Kroger. (And even though Simple Truth products were on the shelves, I saw a fair bit of the old "Simply Roundy's" organic brand as well. Old stock?)

And, it still felt like a ghost town. I would have asked if Roundy's was starting to accept Kroger loyalty cards yet (or vice-versa), but the service desk was empty. The overhead music was periodically breaking up, and there were vacant service departments covered by shelving at the front of the store.

This store might be on the brink. I would not be surprised if Kroger is only remodeling the stores it intends to keep, and is letting others languish until their leases expire. Roundy's is overstored as it is: There are no fewer than 13 Copps, Pick 'n Save, and Metro Market stores in the greater Madison area, and they cannibalize each other. (By contrast Hy-Vee and Woodman's each make do with 3 stores apiece, and other local competitors have 2 or 1).

[storewanderer]

Is this a picture similar to the lower hanging lights and aisle hangers?

https://www.yelp.com/biz_photos/copps-s ... aOgmRe2Ssw

[kr.abs.swy]

I was in the Metro Market Roundy's in downtown Milwaukee last week. A few quick observations:

* There was a blend of Kroger, Simple Truth, and Roundy's products. Not a lot of Kroger, quite a bit of Simple Truth, and still quite a bit of Roundy's. There were some cases where they had a Roundy's organic product next to the matching Simple Truth product on the spice rack. I would guess that they might be overlapping products to get people familiar with Simple Truth before they remove the Roundy's product over time. But that is just a guess.
* It did not accept the phone number I have tied to my Smith's Fresh Values card.
* The store had an incredible prepared foods section. It was around 10 a.m. when I visited and, judging by the quantity of foods they were putting out, it must do very good volume in the prepared foods area. I didn't try anything, but I was impressed by the selection.

[Andrew T.]

Is this a picture similar to the lower hanging lights and aisle hangers?

https://www.yelp.com/biz_photos/copps-s ... aOgmRe2Ssw

Yes, it does. That picture was taken in 2012, which suggests this was actually the prevailing Roundy's remodeling trend, not a Kroger trend. It feels marginally less claustrophobic with an unfinished ceiling than it does with a drop ceiling.

So if Roundy's dropped the lights and aisle signs in some stores, is Kroger going to raise them back up again?

* There was a blend of Kroger, Simple Truth, and Roundy's products. Not a lot of Kroger, quite a bit of Simple Truth, and still quite a bit of Roundy's. There were some cases where they had a Roundy's organic product next to the matching Simple Truth product on the spice rack. I would guess that they might be overlapping products to get people familiar with Simple Truth before they remove the Roundy's product over time. But that is just a guess.

I still haven't seen the proper Kroger brand per se...might just be a matter of time before it shows up, though.

The Roundy's brand is mediocre, and it wouldn't be much of a loss if it disappeared. Copps stores sold IGA products before Roundy's bought the chain in 2001, and some nasty old Pick 'n Saves are conversions from Red Owl franchises or other bygones, so a label change wouldn't be unprecedented anyway.

[storewanderer]

If they are handling it how they did in the past, the Kroger brand items will filter in on "slow moving" categories first. Items like drug, glass jars of red vinegar, glass jars of cherries, etc.

Roundy's brand strikes me as ripe to be discontinued. First off, there is no store named Roundy's, is there? So it isn't a banner brand. It is just a generic brand.

I could see them stepping a little more lightly about discontinuing a "Mariano's" brand if such a brand existed but this "Roundy's" brand, clearly, is just a generic off brand. Replacing it with Kroger won't upset many people if any people.

It will be interesting to see how they handle some of the categories like milk, eggs, and bread that are typically "banner brand" at Kroger banners and not Kroger brand, given the number of banners Roundy's has.

Do they have the Kroger "real time" (full sugar) soda there? Smiths can barely give the stuff away, a shame, as it tastes pretty good actually and I like the package design with the historical Kroger photos.