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Rainbow, Roundy’s, and the EasySave Card

June 20th, 2003

My first paycheck from Medtronic came in the mail today, so I thought it would be novel to deposit it at the location of my first job.

When I was a sophomore in high school, I got a job as a cashier working for Rainbow Foods. For whatever reason, I was promoted even before I started into a sort of “super cashier,” meaning I worked almost exclusively at the customer service counter. I often was a de facto customer service manager, meaning I supervised the other cashiers and had the magic cash register keys. I enjoyed my job: I had (some) authority, I had responsibility, the job paid well, and the job was anything but stressful. Perhaps it was the last point that was the rub: the store wasn’t busy.

My store was brand new when I started working. In fact, I worked at the store even before it opened. Spirits were high: the store was new and bright, and everybody from management on down was cheerful and optimistic about the future. Unfortunately, the large customer base that everyone expected never materialized. I can recall working evenings when the store would be completely empty. The Cub Foods down the street was continuously packed with shoppers, but my Rainbow Foods spent most of its time in quiet desertion.

I think several factors were working against my store. Foremost, the half-mile separating Cub and Rainbow separated two worlds. Whereas Cub was solidly in suburbia, Rainbow felt like it was located in the country. The second factor was store size. Although my Rainbow was by no means a small store, the Cub simply dwarfed it. With bigger size comes wider selection, and people like wide selections. However, by far the most detrimental factor was the existence of the EasySave card. The EasySave card gave customers a “discount” on marked items in the store. The idea, I guess, was that people would think that they were saving bushels of money. The problems with this fallacy were many.

If customers shopped without a card, either by accident or by desire, the prices paid were outrageously expensive. The card, although free to obtain, required registration, which many customers viewed as another way for Corporate America to stuff their mailboxes and phone lines with rubbish. By far the most damning snag was that, even with the card, Rainbow’s prices were higher than Cub’s. (For those of you not from the Twin Cities, Rainbow and Cub compete with each other primarily based on price. If a customer wants exceptional service and exquisite selection, they shop at either Byerly’s or Lund’s, but they must be willing to pay for the experience.)

I know that several other chains in other parts of the country, such as in Terre Haute, Indiana, have Cards. The example that comes to mind are the Kroger stores in the ‘Haute. However, despite having cards, they seem to do brisk business. But why? Simple: there is no viable grocery store competition in the area.

When I worked at the Service Counter, I dealt with customer complaints and questions. By far the most common question was, “Where is the bathroom?” By far the most common complaint was, “I HATE the stupid Card! I’m doing all of my shopping at Cub from now on!” Hey, I couldn’t blame them. After all, my family did all of its shopping at Cub. I found it somewhat humorous when the Rainbow President sent out a memo asking Rainbow employees to shop at Rainbow.

It doesn’t take a PhD to figure out that a lack of customers is bad for business. The parent of Rainbow, Fleming Corporation, entered bankruptcy a few months ago. In reality, the downfall of Fleming was primarily due to the bankruptcy of K-Mart (a large Fleming customer), but Rainbow certainly wasn’t helping the situation. A few weeks ago, Wisconsin-based Roundy’s, Inc. bought Rainbow in federal bankruptcy court. The purchase included most Rainbow stores in Minnesota and one in Wisconsin. Most, but not all. At the time of the deal, my old Rainbow store was not included, so it liquidated its merchandise and dimmed its lights. It was purchased separately about a week after the initial agreement, but the news came too late to stave off temporary closure.

And there, I return to the beginning of this post. My store, Rainbow Foods at Plymouth Station, has a Wells Fargo bank branch inside. I am a Wells Fargo customer, so I thought that I would drive over, see the old store, and deposit my check. (How could I get in if the store was closed? They left the doors unlocked exclusively for access to the bank.). It felt odd to see my store very much like I first saw it: lights dimmed, shelves bare, devoid of people. Ah, the memories of my year-long stint under the employ of the grocery industry.

Indeed, lessons were learned. During my tenure, I gained an appreciation for customer service, a respect of money, and perhaps a bit of social grace. The business world learned from the experience, too: The first thing Roundy’s did was eliminate the EasySave card.

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