Kroger expects to keep Mariano's the same after $800 million purchase

  • Mariano's parent company, Milwaukee-based Roundy's, will be acquired by Kroger Co. for about $800 million.

    Mariano's parent company, Milwaukee-based Roundy's, will be acquired by Kroger Co. for about $800 million. Bill Zars/Daily Herald file photo

  • Bob Mariano of Inverness, chairman and CEO of the growing Mariano's chain, will continue with the company after Kroger Co., acquires the stores by late December.

    Bob Mariano of Inverness, chairman and CEO of the growing Mariano's chain, will continue with the company after Kroger Co., acquires the stores by late December. DAILY HERALD FILE PHOTO MARCH 2014

 
 

Mariano's grocery stores will remain the same despite the sale of the rapidly growing chain to Kroger Co., both companies vowed Wednesday.

The Mariano's name will remain and no layoffs are planned, the companies said. Kroger wants to expand the number of stores and keep Chairman and CEO Robert A. Mariano of Inverness at the helm, said James J. Hyland, a spokesman for Milwaukee-based Roundy's, parent of Mariano's.

"We intend to keep the stores the same," Mariano said, adding that the sale will give the company a better, more competitive edge.

The Mariano's chain has expanded in the past several years amid other grocery shakeups in the Chicago area. Its 34 stores are known for cafes, free grilling of food purchased there, coffee bars and a wide selection of prepared takeout meals.

"This is a great win for our customers, communities, employees and our shareholders, and I personally look forward to continue to exceed customer and employee expectations," Mariano said. "Kroger's scale, knowledge and experience allow us to accelerate the strategic initiatives we have invested in and makes us a more formidable competitor in the marketplace."

Cincinnati-based Kroger said it will buy Roundy's for about $800 million, which includes debt. Kroger then will refinance $646 million in debt. The acquisition is expected to close by late December, the companies said.

The deal will allow Kroger to expand in Wisconsin and the Chicago area. The Roundy's headquarters is expected to remain in Milwaukee, the companies said.

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"Customers should expect to see little change," Kroger spokesman Keith G. Dailey confirmed. "We intend to bring the best of both Kroger and Roundy's together and invest in the four keys of our 'Customer 1st' strategy -- our people, products, prices and shopping experience."

Dailey said any changes would likely be "backroom process improvements."

"Roundy's will benefit from Kroger's size, and Kroger will benefit from the additional purchasing power that Roundy's base of stores provides," Dailey said.

Kroger operates more than 2,600 stores in 34 states. It owns several supermarket chains, including City Market, Ralph's and Harris Teeter.

Kroger operates 14 discount stores called Food 4 Less in Chicago and the suburbs.

Local Mariano's stores are in Arlington Heights, Aurora, Buffalo Grove, Elmhurst, Evergreen Park, Frankfort, Glenview, Northbrook, Gurnee, Harwood Heights, Hoffman Estates, Lake Zurich, Northfield, Oak Lawn, Shorewood, Skokie, Vernon Hills, Westchester, Western Springs and Wheaton. Nearly a dozen more are in Chicago, including some that recently opened.

                                                                                                                                                                                                                       
 

Roundy's has struggled against longtime staples Jewel Osco, Aldi, Shop & Save, Pete's and others. Roundy's posted a $309.9 million loss last year, according to company earnings reports.

Mariano's opened the first suburban store in 2010 in Arlington Heights, where the founder grew up. He also acquired about a dozen former Dominick's sites after its parent company, Safeway, left the Chicago market.

Mariano won consumer's hearts with European floral sections, gluten-free items, pressed juices, sushi bars and other features.

Now, Kroger's is expected to grow the Mariano's banner, Hyland said.

"Our two cultures share similar values and we are truly excited about the opportunities this partnership will create," Hyland said. "We know how much Mariano's customers love their stores and you can continue to rely on your friendly and knowledgeable Mariano's team members to serve your everyday shopping needs."

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