Bob Mariano took early rejection, spun it into grocery business success
By sandra guy Staff Reporter December 7, 2013 12:32AM
Bob Mariano (right) gives Mayor Rahm Emanuel a tour of the new Mariano's supermarket in the south Loop at 1615 S. State St. on October 7, 2013. | Ramzi Dreessen~Sun-Times Splash
Updated: January 9, 2014 6:33AM
Bob Mariano, the man behind the rapid expansion of Mariano’s supermarkets in Chicago, admits his intensively competitive nature makes him “the worst loser” and “a paranoid winner.”
“Sometimes, you’re only as good as your last day’s business,” said the 63-year-old Jefferson Park native, who started his grocery store career as a part-time deli clerk at Dominick’s store No. 13 in Des Plaines when he was 18. “Tomorrow is another day, and things can change.”
“What drives me is a passion for excellence,” said Mariano, chairman, president and CEO of Roundy’s, the Milwaukee-based parent company of Mariano’s stores. “I look at Chicago as my town. It’s my hometown, my neighborhood. How do you take care of your neighbors? It’s a very driven thing.”
That passion underlies Mariano’s decadelong goal to run as many as 50 Mariano’s stores in the Chicago area, including negotiating a potential South Side site at 39th and King Drive, part of the Oakwood Shores mixed-income development at the site of the former Ida B. Wells Homes.
Dig deeper, and here’s a man who failed to realize his youthful dreams: He couldn’t get into medical school and then met rejections from 13 pharmaceutical companies when he pursued his second choice to become a pharmaceutical salesman. In detailing those experiences, Mariano says he has no anger or vengefulness.
“I’m not built to get depressed,” he said. “It’s not about ‘woe is me.’ It’s about pulling yourself up by your bootstraps and go get it. I tend not to wallow. It didn’t work out for a reason and so I ask, ‘Where is the next step?’ I’m not a big fan of looking backwards, only to the extent that it teaches me.”
Mariano earned a bachelor’s degree in biological sciences and chemistry at what he still calls the University of Illinois at Chicago Circle Campus, aiming to be a pre-med major. He unsuccessfully applied to six medical schools. He can still name four — Loyola, Pritzker, Rush and the University of Illinois.
“I was an average student,” he said matter-of-factly. “You had to be above average to get into med school. I was a senior. I didn’t get into med school.
“That’s when I changed,” he said. “I thought I could do pharmaceutical sales.”
During his second interview at one of the 13 firms that rejected him, he was told he wouldn’t get hired because he looked much younger than his 21 years, and doctors to whom he would pitch products wouldn’t take him seriously.
Mariano tried to argue that he would exude credibility if the company would teach him about its products so he could talk intelligently about them. His plea didn’t work, but Mariano still had his heart set on being a salesman.
“Selling is a wonderful thing to learn — to engage people, to speak to them about relevant issues,” he said, his voice rising in excitement.
So Mariano took his first full-time job out of college as a food-service salesman at Oscar Mayer, calling on hospitals, small hotels and restaurants.
Mariano was impressed by Oscar Mayer’s emphasis on training the employees and producing a high-quality product “and doing it right,” he said.
He worked there for a year-and-a-half when Dominick’s recruited him to return — this time as an assistant commissary manager.
He said he went back to Dominick’s in 1973 with a self-assuredness built on his training and success at Oscar Mayer.
Mariano’s father, a butcher, worked at Dominick’s for 20 years before retiring in 1988.
The younger Mariano, the oldest of five children, grabbed onto an emphasis on quality, customer service and well-trained employees. He took as his mentor Dominick DiMatteo Jr., son of the Sicilian immigrant who opened a small delicatessen in Chicago in 1925. The company opened its first supermarket, Dominick’s Finer Foods, in 1950.
Mariano keeps DiMatteo’s traditions alive by visiting stores regularly — he leaves his Milwaukee corporate headquarters two to three days a week to visit the Chicago-area stores — and developing trusting relationships with employees, his colleagues say.
Don Rosanova, executive vice president of operations for Roundy’s, worked with Mariano at Dominick’s in the early 1970s and left with Mariano and most top executives when Safeway took over in 1998.
Rosanova insists that Mariano and other Roundy’s executives have no vendetta-fueled agenda to show that they can offer shoppers the “old” Dominick’s via new Mariano’s stores.
Analysts say the story is quite the opposite: Mariano’s store growth is a success story all its own — so much so that it could be spun off or boost Roundy’s more conventional, besieged grocery stores, such as Pick N Save in the Milwaukee area. When Roundy’s expands to 29 stores by the end of next year, it will make up 18 percent of Roundy’s 160 stores, which also include Copps, Rainbow Foods and Metro Market.
Though Roundy’s needs to boost its earnings and profits, analyst Andrew P. Wolf of BB&T Capital Markets said Friday he believes the Mariano’s stores will eventually create “a lot of value” for shareholders.
Analyst Scott Mushkin at New York-based Wolfe Research said Friday that Mariano’s stores, which are creating so much buzz in Chicago, must prove they can do the same in other markets such as St. Louis and Minneapolis. If so, Roundy’s could spin off the Mariano’s chain by early to mid-2015, Mushkin said.
Safeway’s failure to successfully operate the Dominick’s chain resulted in Dominick’s plunge in market share at the end of 2012 — the latest figures available — to 8 percent, a distant No. 2 to Jewel-Osco’s 26 percent and slightly lower than Walmart’s 9 percent, according to Chicago analyst Mike Mallon, managing partner at DK Mallon.
Dominick’s had held market shares of 14.5 percent six years ago and 24.4 percent in 2002, according to supermarket trade magazines. Dominick’s incurred losses before income taxes of $35.2 million in the first nine months of 2013.
Other chain’s market shares at the end of 2012 include Aldi at 5 percent; Costco at 4.5 percent; Target at 4 percent; Whole Foods at 3.5 percent, Trader Joe’s at 2.5 percent and Mariano’s at 1.5 percent, according to the DK Mallon data.
Rosanova said Mariano attends every new-store employee orientation meeting to talk about how he got started and his experiences in the grocery industry.
“He makes people feel at ease,” Rosanova, 64, said of Mariano. “He has a real personal touch with the people at Mariano’s.”
Mariano’s employees, who are members of Local 881 of the United Food and Commercial Workers union, often walk up to Mariano, call him “Bob” and make suggestions about how to improve the store’s operations, Rosanova said.
The Mariano’s stores aim to appeal to “foodies” with organic produce, meat cutters, attentive clerks and full-fledged delis and bakeries, and to attract bargain hunters with low-priced boxed goods and store brands.
Mariano’s stores in Chicago differ dramatically from those in Milwaukee because of the more ethnically diverse, densely populated neighborhoods in the Windy City. For example, the Chicago stores have coffee and gelato cafes, make a greater variety of pizzas, dedicate more space to meat and seafood, and sell large quantities of Asian, Latino, Italian, Kosher and other specialized foods, Rosanova said.
Mariano’s is known for its special touches, too, such as making hamburger patties and 20 varieties of sausage inside the stores and, at the South Loop store, sporting a grilling station where shoppers can have a steak made to order.
There’s also the live piano player, but Bob Mariano admits that wasn’t his original idea.
“I stole it from Nordstrom,” he said, noting the big impression a piano player at Nordstrom’s first store in Oak Brook made on him.