Since May, six Pick ’n Save stores have closed due to low sales, affecting 448 employees.
The shuttered stores, in New Berlin, Pewaukee, Kenosha, Sheboygan, Shawano and at Timmerman Plaza on West Silver Spring Drive in Milwaukee, are in addition to the Clarke Square Pick ’n Save on Milwaukee’s south side and the Kimberly store that closed in 2016.[caption id="attachment_324251" align="alignnone" width="770"] The Pick ’n Save store on West State Street in Wauwatosa is being remodeled into a Metro Market.[/caption]
Those are in addition to the Pick ‘n Save stores that closed in Waukesha, Saukville, Milwaukee, West Allis and Racine in the two years prior to Cincinnati-based The Kroger Co.’s December 2015 acquisition of Milwaukee-based Pick ’n Save operator Roundy’s Inc.
Once a local grocery store giant, Pick ’n Save won the Milwaukee-area market share battle against Kohl’s Food Stores, Jewel-Osco and Sentry Foods in the 1990s and 2000s. But now, faced with new competitors (some of which even offer home delivery) like Meijer Inc., Whole Foods Market Inc., Costco Wholesale Corp. and Fresh Thyme Farmers Market, Pick ’n Save has had to slim down.
“Prior (Roundy’s) management made serious miscalculations assuming if they overbuilt, no one would come into the market, but as we all know, if you borrow money up to your eyeballs and the new competitors have minimal to no debt, you soon lose the game of chicken,” said grocery industry analyst David Livingston, who used to work for Roundy’s but now is managing partner of DJL Research LLC in Waukesha.
In August 2016, Livingston predicted 13 specific Pick ’n Save stores would close over the next five years because they were redundant and low performing in the market.
Of the six that have closed since May, Livingston had four of them on his list. He said he is surprised the closures have happened so fast.
“I thought they would do one (Pick ‘n Save store closure) a quarter, but maybe they wanted to speed things up because it is so tough to find employees,” Livingston said. “The stores that have closed are very close to other stores. This frees people up to move to other stores. I know Meijer has taken a lot of their employees.”
Livingston believes the pace of Pick ’n Save closures will slow, but also thinks there are still several stores that will eventually be shut down. He expects the first to go will be:
“This could take up to five years,” Livingston said.
James Hyland, a Roundy’s spokesman, has repeatedly said the company will not comment on future store closings.
A bright side for Roundy’s has been the conversion of its Pick ’n Save store at 6950 W. State St. in Wauwatosa into a Metro Market. The five-month transformation will be completed in late September or early October, and will offer customers expanded floral, produce, bakery and deli departments; a new and expanded natural and organic section; a beer and wine bar; and fresh pizza, Todds BBQ and freshly prepared sushi, Hyland said.
“Suffice it to say there will be a large expansion of fresh,” Hyland said.
Hyland would not say how much Roundy’s is spending on the conversion, but said the investment is significant.
“The State Street Tosa conversion is one example of the significant capital investment we are making across our network of Wisconsin stores,” Hyland said in an email. “Metro Market is a specialty food retail banner, which combines our value-oriented conventional offering with an enhanced selection of full-service premium perishable and prepared food departments.”
The Wauwatosa store will be Roundy’s sixth Metro Market in Wisconsin. Other stores are located in Mequon, Brookfield, Shorewood, Cottage Grove and downtown Milwaukee.
“The Metro Market in Wauwatosa definitely made sense; it is a higher income area,” Livingston said. “But at the same time, that is why the Highway 100 store will probably close – the bank has already pulled out of that store.”
Livingston believes Kroger will convert more Pick ’n Saves into Metro Markets where it makes sense, possibly at Pabst Farms in Oconomowoc, and in Delafield, Fox Point, Hales Corners and Grafton, he said.
As far as the store closings, Livingston said they’re not necessarily a bad thing.
“It benefits everyone but the landlord,” he said. “Half of the sales go to the other Pick ’n Saves, which helps those stores’ sales per square foot, and the other half goes to the competitors. Kroger is just taking Pick ’n Save into the 21st century.”