Safeway's 11 former Dominick's grocery stores will be taken over by Roundy's Inc. for $36 million the Milwaukee Wisconsin Journal Sentinel reported Monday.
"This acquisition is transformational in terms of Mariano's expansion plans in the Chicago metropolitan area," Robert Mariano Roundy's chairman and chief executive said in a statement The Sentinel reported. "We certainly realize that some investors do pay very close attention to the dividend. But the reality is that this opportunity came to us at this point in time, and not to fully support its success would be a mistake. "These 11 stores are an excellent strategic fit with our existing network of 13 Mariano's stores and our current expansion plans (for the brand)." Safeway sold the stores to Roundy's in order to focus its efforts on other aspects it is thriving in according to The Wall Street Journal.
Over 20,000 employees work for Roundy's. Thirteen-thousand five-hundred are in Wisconsin. The company has 163 grocery stores, and 100 pharmacies as part of its Pick 'n Save, Rainbow, Copps, and Metro Market assets.
Mariano will have 29 stores in the Chicago area by the end of next year when all is said and done. Ten of these are expected to in the heart of Chicago, with 19 in the suburbs. The company also plans to improve, and upgrade its stores throughout Milwaukee.
"They're focused on Chicago. There's no doubt about that," David Livingston, a grocery market analyst based in metro Milwaukee told The Sentinel. Livingston also mentioned Roundy's shares for its Pick 'n Save stores in Milwaukee were decreasing in shares.
Pick 'n Save has struggled to keep up with its competitors like Wal-Mart, and other retailers, however the company plans to focus on setting itself from its counterparts as grocery store chain makes its way into the spectrum.
"In Milwaukee, price is king in the grocery market," Livingston told The Sentinel. "(And any grocer seeking to be competitive here realizes that)."
