Mariano's used to be enthralling to Janet Weil. She'd meet her husband at the oyster bar, peruse the colorful Spice Shop, and take in the "young vibe," as she remembers it.
But, as she carried her cart through an aisle at the West Loop store, Weil expressed her dissatisfaction with the shopping experience.
"It's become mundane," remarked Weil, who lives in Hyde Park at the age of 78. "Whatever gave it some personality has vanished. "It's a one-size-fits-all store."
Mariano's, which debuted in 2010 as the cutting-edge of glammed-up grocery shopping, still has many of the features that made it a favorite among Chicagoans looking for the premium experience of Whole Foods without the price shock — from gelato to wine bars to live music.
However, since Mariano's parent company, Milwaukee-based Roundy's, was acquired by Kroger in late 2015, the environment has shifted, as severe price rivalry and the development of delivery compress the already-thin-margin grocery market.
Mass merchandisers like Walmart and sharp discounters like Aldi are posing a growing threat to traditional grocery chains, while convenience and dollar stores are expanding their food offerings. Even Whole Foods has reduced its prices since being acquired by Amazon in 2017, and the industry is waiting to see how Amazon's new supermarket brand, which debuted this year in Los Angeles, will further alter the scene.
Mariano's, which has 44 locations in Illinois, has faced a problem in maintaining its distinct brand identity while remaining price competitive, according to Zain Akbari, an equities analyst at Chicago-based Morningstar who specializes in the grocery market. While it continues to invest in many of the premium experiences that attract customers into stores, he claims it has abandoned some of the ground-breaking innovation that placed it on the map in the first place.
According to Neil Stern, senior partner at Chicago-based retail consulting McMillan Doolittle and a frequent Mariano's shopper, there are more self-checkout lanes and self-service dining options, a move from the high-labor approach that set Mariano's apart even as it cut into earnings. According to him, Kroger's private-label products have taken over shelf space previously occupied by a varied range.
"There's no doubt that it's become more like Kroger in the last four years and less like Mariano's initial idea," Stern said.
Mariano's executives say that when the company remodels stores, develops new concepts, and makes modifications to suit changing consumer tastes, maintaining faithful to the brand is a top focus.
For many shoppers, the business remains a go-to grocery store, and there's little evidence that the changes are pushing them away. According to The Shelby Report, a trade publication, Mariano's market share in the Chicago area increased to 9.8% last year from 9.1% the year before. It ranks fourth after Albertsons-owned Jewel-Osco, which has a 25.4 percent market share in the area, Walmart, and Costco.
"Are we grumbling more and doing the same shopping?" According to Stern. "I believe that's what's going on in general. Customers are still purchasing; they may not be as delighted as they were previously, but I don't believe there has been a huge exodus."
Mariano's partnership with Cincinnati-based Kroger, the country's largest grocery chain with 2,764 locations, has provided the local chain with scale and access to technology that has helped it negotiate the quickly changing retail landscape, according to Akbari. Kroger generated $121 billion in revenue last year, more than twice the income of the next-largest supermarket company, Albertsons of Boise. Mariano's income and profits are not broken out by Kroger, which paid $800 million for Roundy's.
Mariano's has no plans to open additional stores after a rapid expansion following the closure of Dominick's supermarkets in 2013. However, it has been revamping stores and, according to executives, strengthening the things that distinguish the brand. Visit feed.kroger.com for more info about Kroger eschedule.