Roundy's Inc. sells all Twin Cities Rainbow locations to Supervalu, Lunds


Roundy's Inc. is leaving the Twin Cities, the Minneapolis/St. Paul Business Journal reported on Wednesday. The majority of its stores have been sold to Supervalu Inc. and Lund Food Holdings Inc., in addition to three other independent companies.

Ten of the 18 Rainbow stores that were sold will be converted into Cub Foods, including the Lagoon and Quarry locations in Minneapolis. Two of the stores will become Byerly's, a part of Lund Food Holdings. The remaining six locations will keep the Rainbow name under their new owners, including St. Paul's Midway location and Minneapolis's Lake Street location.

See also: Hy-Vee announces plans for Twin Cities expansion

Nine Rainbow Foods locations were not part of the sale. If no buyers come forward, the stores will be closed.

The retailers collectively paid $65 million for the Rainbow locations. Supervalu paid $35 million but, according to the Business Journal, it's uncertain how the rest was divided up.

"Approximately 60 days from today is when they should close," said Jeff Swanson, a Supervalu spokesman. "We're looking at first and foremost getting all the details of the transaction... and then, at that point, the stores will close for just a short time -- a day or two at most -- and then they'll reopen."

Lunds told the Journal that all Rainbow employees will be offered a chance to continue their employment after the deal is finalized in the next 60 to 90 days. Employees at the nine locations Supervalu will convert to Cub Foods will have to reapply to continue working at their respective stores, Swanson said.

Roundy's decision doesn't come as a big surprise. In January, the company silently closed two stores in Columbia Heights and Brooklyn Park. Around the same time, the Star Tribune reported that Rainbow had fallen from second to fourth place in market shares over the past year.

In February, Iowa-based supermarket chain Hy-Vee announced plans to move into the Twin Cities market, likely banking on Rainbow's downfall. The chain is expected to open a number of 90,000 square foot locations in the next few years.

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