Oakdale Rainbow will soon become a Cub

The Rainbow store in Oakdale will become a Cub Foods as Roundy’s, getting out of the Twin Cities market, sold some stores to Eden Prairie-based Supervalu. (Linda Baumeister/Review)

Stiff competition from big box retailers like Wal-Mart and Target and a lagging economy has pushed Milwaukee-based Roundy’s out of the Twin Cities grocery market. The company, which owns Rainbow Foods stores, announced on May 7 it would be selling 18 of its 27 Rainbow stores. 

“The economic downturn over the last few years, coupled with an increased competitive footprint in the Minneapolis/St. Paul market, has made it difficult for Roundy’s to keep the Rainbow banner competitive,” Roundy’s CEO Robert Mariano said in a written statement.

New focus for company

According to Mariano, the sale of the Rainbow stores in the Twin Cities to local operators will “provide those stores better stewardship in serving their communities in the Minneapolis/St. Paul market going forward.” He added that these transactions would allow the company to strengthen its business in its core Wisconsin markets, as well as focus on expanding its market in the greater Chicago area.

Twin Cities-based SuperValu, Lunds and three other local supermarket chains will buy 18 Rainbow stores in the metro from its competitor.

Of those 18, SuperValu will turn 10 of them into Cub Foods stores, including the Oakdale store at 7053 Tenth Street N. Two Rainbow stores in Eden Prairie and Woodbury will become Byerly’s, while six others will remain Rainbows, but under new ownership -- including the Maplewood store at 2501 White Bear Ave.

Roundy’s is reportedly selling the stores for $65 million plus the monetary value of the current inventory. SuperValu’s purchase price agreement for its 10 stores is $35 million in cash plus the cost of inventory that will be purchased at the closing of the Rainbow store sale, according to a press release from SuperValu.

The transition of the stores should be completed by summer’s end.

“Our plan is to close on the financial transactions of the stores over the next 60 days,” SuperValu spokesperson Jeff Swanson said. “Once the deal’s done we will close the stores for a very short period of time -- one to two days maximum, mainly to change out signs and restock shelves.”

Local reaction

Several shoppers making their way out of the Oakdale Rainbow on Wednesday afternoon said the sale shouldn’t affect their buying patterns.

“As long as there’s a grocery store here I’m happy,” Mike Nordine of Oakdale said. “I like Rainbow just fine, but Cub has some items that Rainbow doesn’t have.”

Another local couple, who did not want their names used, said they shop at both Rainbow and Cub stores and the change of ownership would not change their shopping habits.

“I do like Cub, especially their baked goods,” the woman added.

However, another Oakdale woman was disappointed by the news that Rainbow was leaving.

“I’m pretty loyal to Rainbow,” she said. “I’m sorry that they are leaving. I have always been happy with them.”

Cub Foods corporate leaders spent the day of the announcement traveling around the area to go over the changes with store employees at each of the 18 Rainbow stores being affected. Swanson said the company plans to hire 1,000 full and part-time employees over the next few months.

A couple of employees at the Oakdale store were encouraged by the prospect of being bought by another unionized grocery company, but apprehensive about the possibility of losing their jobs.

“I just got the news today,” an employee said. “I’ve only worked here a short time, and we all have to re-apply for our jobs. I have no idea if I will get to keep my job. I’m worried.”

Another employee said he has built up seniority and vacation time. He said the uncertainty of his job security scares him, but he’s more hopeful because the purchaser is SuperValu.

“We could have been bought by a non-union company, and that would have been hard on the employees.”

Swanson did not confirm if any employees would be let go, but said Cub is looking for people passionate about food and customer service. If current Rainbow employees have those qualities, “we encourage them to apply,” he said.

Joshua Nielsen can be reached at jnielsen@lillienews.com or 651-748-7822.


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