Roundy's tries a new concept with Shorewood Metro Market
Rick Wood
Bulk spices are put on shelves as final preparations are underway at Roundy’s upscale Metro Market in Shorewood, which will open Tuesday. The market will feature a one-stop shop with departments for groceries, a bar, a pizzeria, a bakery, a coffee shop and a pharmacy.
Rick Wood
The new Metro Market on N. Oakland Ave. underscores Roundy’s continuing effort to revitalize itself and reclaim market share in Milwaukee.
Shorewood — Roundy's new Metro Market store on Oakland Ave. is built around the lives of millennials and urban professionals who want quality, fresh prepared food offerings they can't find anywhere else.
The store, which will open Tuesday, has been designed to address the earthquake-like shift in the habits of American consumers for whom pantry-stocking of long shelf-life food has fallen out of favor, having been replaced for many people by multiple weekly trips — and sometimes daily trips — to the local grocery store.
And because the store happens to be in one of the most hotly-contested grocery markets in the nation, everything has to be price-competitive.
The folks running the store say they are prepared to deliver on all counts.
"Bar none, it will be the nicest grocery store and finest shopping experience in the state of Wisconsin," said Tony Kuchinsky, the store's director. "I still get taken aback when I walk through the front door."
Roundy's, about three months into its new life as a subsidiary of The Kroger Co., has a fair amount riding on the Shorewood store rollout as it seeks to revitalize itself and reclaim market share that has eroded under withering competition in Wisconsin and Milwaukee.
The store will include some of the most popular features of Roundy's successful Mariano's chain in Chicago.
Industry insiders say the rollout is also being closely watched for the marriage that it will introduce, specifically the higher-end products and detail-obsessed service of a Mariano's, combined with the pricing power of Kroger, which has quietly and steadily grown to become the world's third-largest retailer behind Walmart and Costco.
"It will be interesting to see how much of this is not just them leveraging Mariano's successes, but also how much are they thinking about what they might be able to learn from this execution that might apply to other Kroger divisions," said Jim Hertel, managing partner of food retail and production consultancy Willard Bishop, based in suburban Chicago.
"It really is, how do you deliver a really premium experience for a not so premium price," Hertel said. "That's something Kroger is good at."
Kroger operates nearly 3,500 food stores in 35 states. By virtue of its purchase of Roundy's, Kroger has about two-thirds of the grocery market share in Wisconsin.
The new Metro Market store consists of more than 90,000 square feet of retail space split between two levels. It will have 12 beers on tap, a rolled-to-order sushi bar, an oyster bar, a seafood market, a pizzeria, a deli, bakery, barbecue smoker, a make-your-own trail mix bar and a spice shop — all delivered in an environmentally friendly green building.
Most of the market's specialty areas exist as stores within the store, each with its own brand. The bakery area is presented under the Badger Baking brand and the seafood market area is known as Metro Fish Co. The spice area is known as North Shore Spices.
Such branding represents "the kinds of things that enhance the shopper experience," Hertel said. "They walk out of the store after they shop there and say, 'Wow, that's different than anything I've experienced in a long time.'"
The strategy helps the store stand out in a crowded, fiercely competitive market where everyone from pharmacy retailers to home improvement warehouses are selling food.
"I would say that Mariano's is considered to be on the leading edge of that," Hertel said. "A lot of people have taken notice of what they are doing."
Roundy's declined to say how much it is spending on the new store, but when it was a public company, executives said that a Mariano's store typically involves an investment of $5.5 million to $6 million. The Shorewood Metro Market investment is in that range. It will employ about 400 people.
Adjacent to the store is a 314-space parking garage.
Roundy's also operates Metro Market stores in downtown Milwaukee, Brookfield, Mequon and Madison.
Shifting business
The Metro Market and Mariano's stores are examples of the abrupt shift in direction occurring in the food business, with demographics largely setting the compass headings.
"The shopper dynamics have really changed during the past couple years," said Rick Shea, president of Shea Marketing Inc., a suburban Minneapolis-St. Paul grocery and food marketing consultancy.
"The retailers are in the investment mode right now," Shea said. "It is indicative of what the trends are telling them."
Younger people "eat more on the go. They like fresh foods. They tend to have more disposable income," Shea added. "Shelf-stable items that you pantry-load are just not what consumers are looking for. They are looking for fresh alternatives. Things like canned products are kind of the antithesis of everything the new millennial consumer looks for."
That shift is not lost on Kuchinsky, the Metro Market store director.
"Fresh prepared foods is the direction we're heading because that's where the business is heading," Kuchinsky said. "People don't want to purchase groceries for a month anymore. They want to be able to come in on a daily basis and pick up fresh products."
There also is a shift in the food business in which grocers are seeking to take back some of the market they have lost to restaurants, Shea said.
"We've been talking about this convergence between restaurant vs. grocery retail for a few years," he said. "It's been a question for retailers for years how to bring those dollars that go to a restaurant back into the store."
Again, Kuchinsky said the Shorewood Metro Market store delivers.
"Just factoring in all the specialty food departments and including the grill station, you could come in here and eat lunch or dinner months in a row and not eat the same thing twice," he said.
The Metro Market features a sit-down cafe and bar area complete with a piano and a fireplace.
"What I always say to describe this is it's more of a culinary experience than it is a grocery store," Kuchinsky said. "It's absolutely more than a grocery store. It's a destination."
How it eventually succeeds will likely determine what grocery stores across the region and the nation might look like.
"Kroger's been one of the leading players as far as identifying the trends and adapting their store products," Shea said. "I think they certainly looked at the benefit of Mariano's as one of the reasons why Roundy's was attractive to them."
Roundy's is not the only food store that has shifted its focus to prepared and fresh offerings. National chains Whole Foods and Trader Joe's have a presence in the Milwaukee area. And, the Balistreri-owned Sendik's Food Market stores are a growing presence in the region's upscale grocery market, excelling at fresh, prepared offerings and leveraging a reputation for uncompromising customer service to move aggressively into the online grocery market.
Look for the shifting trends toward fresh, prepared foods and natural ingredients in the food industry to gain momentum.
"What you start to realize is that it's affecting everybody now," Hertel said. "What is, in fact, better for me and how do I accomplish that as a consumer? There is a lot going on."
WHY IT MATTERS
Industry insiders say the rollout also is being closely watchedfor the marriage of higher-end products and detail-obsessed service of a Mariano's, combined with the pricing power of Kroger.
Kroger has quietly and steadily grown to become the world's third-largest retailer behind Walmart and Costco.
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