On Tuesday, December 19th, a bomb was dropped on the staff at Roundys' Headquarters in Milwaukee when managers announced that more than 60 employees would be laid off due plummeting sales across the board.  The announcement shocked some of Roundy's analysts because they were starting to expand their reach not more than 6 months ago.

However, Roundy's competitors have been expanding as well.  Walmart has expanded two of their 27th street locations while Woodmans is growing their share of the grocery market.  All together, Roundy's competitors have eaten into about 3% of their market. 

Increased competition is not the only reason why sales have flopped.  The recession has contributed to what analysts call "cherry picking", where consumers visit multiple stores to secure the lowest prices.  In times of plenty, people visit one store for all of their grocery needs.  However, when people are laid off or unemployed, they have more time on their hands to shop for better deals.  Below is a letter dispatched to Roundy's employees in an effort to placate a decision that head managers reached nearly two weeks ago.

A Letter by Chairman Bob

"As President and CEO of Roundy’s, I am a firm believer in the motto of one of America’s greatest Presidents, Harry Truman. On his desk in the Oval Office was a simple, direct phrase, “the buck stops here”. In that spirit, I feel it is my obligation to communicate directly and honestly with you, my trusted colleagues.

Regrettably, sometimes a Company must make some difficult decisions that have an impact on its people in order to make sure it remains sound, profitable, and competitive in the marketplace. Today, we reduced our workforce at the home office. I have supported these decisions because the present national and regional economic situation leaves us no choice. We must tighten our corporate belt in order to face an uncertain economic environment in our market. I can assure you that painstaking study and reflection was taken before we came to this conclusion.

Roundy’s is justifiably proud of its history of treating its employees fairly and with great respect. Our employees are one of our most valuable resources. That’s why we undertook this effort with great care and deliberation.

I am confident in our future, because we are fortunate to have so many wonderful employees. Nationally and in Wisconsin and Minnesota, we are suffering from a very deep recession that has resulted in cautiousness among our customers. The course to recovery will require patience, careful planning and dedication. I know we will get there!

Regards,

Bob Mariano"

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Comments (1)

• |68.112.187.xxx |2010-03-24 21:25:53 not bob  - Don't forget about the retail store employees!
  Why has no one mentioned anything about the around 300 employees let go from there stores to cut costs over the last 2 months? These were not part time baggers and clerks but full time employees who counted on there jobs to support there familys.
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