Stop in to one of the eight Mariano's Fresh Markets in the Chicago area and you could spot founder Bob Mariano pushing carts, rewrapping meat or helping clean up spills.
The eponymous, upmarket grocery stores, tended with his exacting sense of detail, have made him something of a local celebrity. But as CEO of Milwaukee-based Roundy's, a nearly $4 billion company, Mariano also oversees about 160 midrange stores in Wisconsin and Minnesota facing all the well-chronicled challenges of the traditional grocery business.
Mariano started behind the deli counter at Dominick's as a high school student in 1968, eventually becoming president of the chain. His decades of work in the Chicago market make him confident in his strategy for Mariano's: He believes his new stores can give shoppers everything they want or need, and at competitive prices.
Key to his model is attracting customers with luxury items and getting them to spend time in the store — perhaps at the wine bar with a plate of cheese and prosciutto — and to notice prices on toilet paper or laundry detergent low enough to save them a trip to Costco.
These more pedestrian household items aren't the reason customers are coming to his stores, and they're not moving in large quantities. But the goal is to get people to do all their shopping at the one store.
"You want the full basket," he said.
Mariano, 62, is taking on a deeply divided Chicago grocery market, where supermarkets like Jewel-Osco and Dominick's have suffered from heated competition with upscale chains like Whole Foods and discounters like Aldi. He is also trying to reinvigorate Roundy's other grocery chains — Copps, Rainbow, Pick 'n Save and Metro Market — in markets where he concedes he has some learning to do.
Mariano admits his stores in Wisconsin and Minnesota face more challenges than does Mariano's. Although it's a short drive, he said, it's a different customer. He's also focused on training employees.
"The difference is, we started with a white sheet of paper here, and there, we have people, and we want to refocus them," he said.
In the meantime, Roundy's has had to cut prices. For the third quarter ended Sept. 29, net income, excluding tax charges and expenses related to management changes, slipped 29 percent, to $8.8 million.
The company has said that sales have slipped in Wisconsin and Minnesota as a result of Wal-Mart ads comparing prices between their stores and what customers would pay at the leading local supermarket. Jewel-Osco has faced similar attacks in Chicago.
Roundy's stock closed at $5.83 Friday, down 31 percent from $8.50 at the initial public offering a year ago.
The average Mariano's grocery store is expected to gross $50 million in annual sales, compared with $20 million to $25 million for an average supermarket. Also, Roundy's has projected double-digit same-store sales gains on an ongoing basis, something the three stores open more than one year have been able to accomplish.
L. Dick Buell, a longtime Chicago marketing executive who serves with Mariano on two boards at the University of Chicago Booth School of Business, said his colleague is viewed as one of the most experienced CEOs in the retail food industry.
During nearly 30 years at Dominick's, learning every piece of the business, from the warehouses to the dairy operation to executive management, Mariano built an "almost unequaled" knowledge of the business. Now, Mariano has also become increasingly astute at using financial and consumer data, Buell said, "and he's making very good decisions for Roundy's."
Blur the line
On a recent tour of the Mariano's at Monroe and Halsted streets in Chicago's Greektown neighborhood, the anchor of a development that garnered $7 million in city tax increment financing funds, Mariano called his eighth location "another turn of the wheel." With each store, he said, the company tries to add something new — in this case, a wall dedicated to bulk spices, as well as an oyster bar.
Mariano's stores are designed to blur the line between shopping and dining because "customers today are thinking meals," he said, "as opposed to, 'I need to go shopping for a list of items.'"
That means sometimes customers want to have a meal in the store, sometimes they want to buy something prepared to take home, and other times they might be looking for ingredients to make a dish they've seen on the Food Network, "and that may be the same customer at different times," he said.
Walking through the store, with Mariano stopping along the way to pick up a tiny piece of paper off the floor and hand it to a nearby employee, was a meal in itself, with samples of potato pancake and bacon, Amish cheese, caramel popcorn and peanut butter fudge. Mariano's stores feature sushi bars, short-order grills and eye-catching confections like hand-dipped caramel apples and cakes decorated like Tiffany gift boxes.
The first Mariano's opened in 2010, and the ninth is expected to open in Frankfort by spring. Four more stores are under construction, with another four in the planning stages. The company expects to open as many as 30 Mariano's in the Chicago area.
Mariano's aspiration for the new chain is to be "the Nordstrom of the grocery world." Part of that is instilling a high level of professionalism in his employees, he said, pointing to observations from a recent trip to Rome.
"Food people in this country are not perceived as professionals, where there, the seafood monger at the store has been there for generations," he said. "That's their life."
Grocery jobs in the U.S., by comparison, are seen as more transient work, often part time. While part-time workers will remain an important part of the Roundy's workforce, he said, the company wants "an employee who leaves an impression."
Although Mariano is only in Chicago a day or two a week — the rest of the time, he's in Milwaukee — he keeps an eye on his stores through friends and family. Daughter Jenny shops at the Roscoe Village location and lets him know if anything's amiss.
"I'll get a text: 'Daddy the strawberries are not ripe,' or something," he said, adding that he gets on the phone with employees right away. "I don't tell them how I know that, but my daughters think it's kind of humorous because while they're still in the store, there's this collection of people congregating around the strawberries."
Don Rosanova, executive vice president of operations at Roundy's, said Mariano has equally high standards for his management team.
"He'll let you know," Rosanova said of disappointing Mariano. "He'll have a frank and honest discussion about what were the expectations, what was the time limit, what happened, what got in our way."
Rosanova, like many Roundy's executives, worked with Mariano for many years at Dominick's. He said the boss is known for moving employees into a variety of jobs.
"He puts you in spots where you might not be the most comfortable but he feels you have the potential to grow," he said.
'Very much Italian'
Robert Mariano was born on Chicago's South Side to Robert and Dorothy Mariano, the first of five children. The family moved to the Northwest Side when Mariano was 5 years old because their home was being demolished to make way for an expressway.
In the large family, Mariano said he learned to wash clothes and clean the house at an early age, with daily and weekly chores that evolved as he got older. Family excursions included trips to Cock Robin for ice cream or trips to visit aunts and uncles.
"They used to be very animated pinochle and poker players," he said, calling it "very much Italian."
"That kind of environment allows you the opportunity to voice your thinking, have it challenged, played back to you — and it enriches your ability to think about things in different ways," he said.
Mariano's father was a salesman for Oscar Mayer who joined Dominick's in 1972. Working together in the corporate office for a few years brought some challenges.
"We were both terribly independent, very focused on excellence, and strong-willed and strong-minded, and we could disagree intently," Mariano said. "He and I could argue about what we wanted to argue about and then 10 minutes later we'd be hugging each other."
Mariano's first job, at age 15, was delivering papers for the Jefferson Park News Agency, which, at the time, was carrying at least five city dailies and two Polish newspapers. He took a job as a deli clerk at Dominick's in 1968, leaving about two years later for college at the University of Illinois at Chicago.
After pre-med biology studies as an undergraduate, Mariano said, he wasn't accepted to graduate schools. He tried teaching but realized he didn't have the patience. He thought about pharmaceutical sales but was rejected by more than a dozen companies.
"You need to be flexible," Mariano said of career decisions. "Try different things, see what you love and who you love doing it with."
Mariano worked in sales at Oscar Mayer before returning to Dominick's as assistant manager of the chain's commissary, which prepared salads, Italian beef and other items for the chain's approximately 60 stores at the time.
Owner Dominick DiMatteo made a practice of calling the junior employee when everyone else was at lunch.
"He'd call me up and say, 'Bobby,' in a rough, gravelly voice, 'I want celery hearts and cheese,'" Mariano said.
He'd prepare celery hearts and Parmesan for the boss, and was usually grilled for his trouble. "He was a professional at the Socratic method," Mariano said.
DiMatteo grew to rely on Mariano, moving him around in the company to positions in which he needed something done. He became vice president of dairy for Dominick's and was later tapped to build a bakery from scratch for the chain.
"I was too naive to be scared," Mariano said of the bakery job. "It was a pretty big responsibility, but it turned out well."
By the early 1980s, Mariano said, he knew he wanted to run a grocery company someday, and Dominick's paid for his MBA from the University of Chicago.
As a senior vice president, he spearheaded development of the Fresh Store, which dramatically expanded produce, meat, deli and carryout offerings.
Dominick's son, Jim DiMatteo, described Mariano as "a stand-up guy, a great manager of people and a visionary." Of the Mariano's concept, he said: "It's nice to see a store like that back in Chicago."
Dominick's was sold to the Yucaipa Cos. in 1995, and Mariano was named president and CEO. He led Dominick's through an initial public offering in 1996, but the chain was sold to Pleasanton, Calif.-based Safeway in 1998.
DiMatteo recalled a Safeway team coming in to inspect the deli department and asking how many kinds of potato salad were made at a given time.
"We made seven," he said. "Their response back was you only need three, and that's kind of the way they managed."
The takeover "was not an enjoyable or enlightening experience," Mariano said, and he elected to leave before the deal closed. His five-year noncompete agreement led to a frustrating interlude in Mariano's career. "I wanted to pull my hair out," he said.
Dominick's Chief Financial Officer Darren Karst had left with him, and they met with retail food businesses in the area that were looking for management teams. They joined Roundy's in 2002, as the company was trying to transition its business from predominantly wholesale to retail. Mariano led the company through six acquisitions and began construction on a distribution center in Kenosha, Wis.
In 2005, Mariano met his wife, Nina, through a fix-up by her father, Dominic DiFrisco, a public relations executive who trained Mariano in media after a store crisis in the 1990s. She works for Mariano's as community relations manager.
Nina traces her husband's passion for the grocery business to his upbringing with a father in the food industry and in a home where dinnertime was very important.
"I think the glue of their family was the dinner every night," she said. "Not just sitting down to the table, but the whole cooking process with everyone in the kitchen."
Jenny Mariano, a Chicago schoolteacher, said her father is "the first person I call when I need advice."
"He says it as it is," said Jenny, 24, adding that while she sometimes sweats small details, her father tells her to "change what you can change and then move on."
Nina Mariano said she sees no signs of her husband slowing.
"He's not one to sit and putter, and he doesn't like golf."
Mariano, who said he expects to work well into his 70s, put it a different way: "I think if you're a student of this business, you're constantly learning. There's no same old, same old."
CEO of Milwaukee-based Roundy's
Lives in: Inverness
Personal: Father of four children and one stepson. Wife Nina Mariano is community relations manager for Mariano's Fresh Market, handling marketing, events and other initiatives.
Management style: "I'm not a texter or a twitterer, and my emails are the most brief that you can imagine. … I want to have a conversation face to face, and I want to see their reactions. That's how I go about my business."
Corporate cause: In 2003, Mariano established the Roundy's Foundation with a focus on donations to organizations combating hunger, domestic abuse and illiteracy.
On mentor Dominick DiMatteo: "His passion for taking care of the customer, always trying to tickle the customer in terms of what they were looking for, his dissatisfaction with the present, was unsurpassed. … It wasn't about words, but what he did, and the relentless focus for being very, very good."