2014 was a tumultuous year for Twin Cities grocers. A longtime player Milwaukee-based Roundy’s, owner/operator of Rainbow Foods, completely pulled out of the market. Local competitors quickly snapped up the Rainbow stores in prime locations. Competitors included SuperValu Inc, operator of Cub Foods; Lund Food Holdings, operator of Lund’s and Byerly’s; and Jerry Enterprises, operator of Jerry’s Food stores. Their collective strategy was aggressive as these Rainbow stores were in most cases within a mile of Cub, Lund’s and Jerry’s existing stores.
Some new grocery competition is coming to the Twin Cities. Des Moines-based Hy-Vee has closed on three stores and has a dozen more in the works after years of “sitting on the sidelines.” In addition, Fresh Thyme farmers market has also stepped up their efforts and has secured two sites. Minneapolis-based Target Corp. has opened a Target Express at the University of Minnesota campus location and announced a second location in the St. Paul Highland park neighborhood.
Suffice to say there has been a significant shift in the Twin Cities grocery players. The customer is going to have new options in choosing where to spend the family grocery dollar, the pie is getting smaller, and the margins for these grocers is getting tighter.
Ideally, the consumer benefits but time will tell. I would not rule out the possibility of another out-of-state operator to make a play in the market.
Michael G. Sims | Prinicipal
Mid-America Real Estate – Minnesota, LLC
5353 Wayzata Boulevard, Suite 650 | Minneapolis, MN 55416
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