BY ED FELIEN
The corner at Lake and Minnehaha is changing dramatically. On the surface it looks calm and much the same, but there aren’t nearly as many cars in the parking lot as there were last fall, and if you go inside Target or Rainbow the most dramatic thing you see are empty aisles.
Target’s problems started last fall with the security breach in its credit card system. Someone hacked the credit card information for Target customers, and it cost Target $100 million to upgrade to microchips and $61 million to compensate shoppers who had been victimized. But the biggest loss was in consumer confidence. According to Kantar Retail, a consulting group, Target has lost almost a quarter of its customer base. In January of 2013 43% of Americans shopped at Target. This January that figure dropped to 33%. And it shows in traffic at the Lake Street store.
And, now, Rainbow has decided to give up on the Twin Cities market. Milwaukee-based Roundy’s has sold its 18 Twin Cities Rainbow stores for $65 million. In a statement they said, “The economic downturn over the last few years, coupled with an increased competitive footprint in the Minneapolis-St. Paul market, has made it difficult for Roundy’s to keep the Rainbow banner competitive.”
Ten of the stores will be sold to Super Valu/Cub. Two will be sold to Lunds and re-opened as Byerly’s. And the Lake and Minnehaha store and five others will be sold to independent owners.
It’s still a mystery as to who the new owner will be at Lake and Minnehaha. Some people think Hy-Vee might make a play for the Twin Cities market. Employee-owned Hy-Vee operates more than 230 retail stores in eight Midwestern states, including Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin. Or, some think, it would be natural for Seward Co-op to expand into that space, but they’re already committed to opening a new store on 38th Street and 4th Avenue.
Neighbors are concerned and watchful. What’s been a busy hub for 40 years has suddenly become a question mark, and people know that at the end of the Rainbow you might not find a pot of gold. You might find an empty parking lot.
