Headquarters: Woodbury
Inception: 1983
Family name: Kowalski
What the company does: Multi-unit full-service grocery retailer
Structure: Corporation
Principal owners: Mary Anne Kowalski and Kris Kowalski Christiansen
Employees: 1,870 (approx.)
Family members in the business: 8
Family members on the board: No board

Changing your customer is never easy. Many businesses try it and fall off a cliff. But it’s part of the Kowalski’s origin story. In the early 1980s, Jim Kowalski was working for Red Owl, a mid-market grocery retailer owned by Eden Prairie wholesaler SuperValu. He took an interest in the chain’s underperforming Grand Avenue store in St. Paul; its trade area contained the most affluent residential districts in the city.

SuperValu’s attention had shifted to its new brand, Cub Foods, and Kowalski thought he could make something of the cramped store with low ceilings. This was before Whole Foods, before Trader Joe’s, when the nearest Target was in Roseville. Among nearby grocery stores, the Lunds in Highland Park was pretty standard, while RC Dick’s at Grand and Fairview was an old National Tea living out its dotage.

In 1983, Jim and his wife, Mary Anne Kowalski, took their savings, plus a loan from a friend, and bought that Red Owl. Three years later, they bought another in White Bear Lake. Warehouse-style grocery like Cub Foods was starting to shift the market, and the couple knew they needed to pivot. “Jim had so much respect for Don Byerly,” whose Byerly’s stores exuded elegance and refinement, says Kris Kowalski Christiansen, their daughter. “We realized there was no room in the middle and forged a new destiny.”

“We did it gradually,” recalls Mary Anne. “We hired a deli person, who urged us to upgrade our deli. We did the same in bakery. We spent money to make money.” The grocery business is notoriously low margin; if you couldn’t make it the way Cub did, with volume, you needed a value add that customers would pay for.

“We stopped price-based advertising and taking coupons. That was scary. But if Byerly could pull it off on St. Paul’s East Side and in St. Louis Park, why couldn’t the Kowalski’s do it on Grand Avenue and in White Bear?

Then in 1993, trading on Jim’s history with SuperValu, the family opened a franchised Cub in White Bear Township, which built cash flow and purchasing power for the group. “We Kowalski-ized that store,” Kris says, meaning that, as Cubs go, it’s particularly service oriented and responsive to customers.

But the Cub was mostly a detour, and the family’s next move went dramatically in the opposite direction. In 2000, they opened the first Kowalski’s Market built from the ground up, in Woodbury. It contained a glass-walled bakery oven, multiple restaurants, a JUUT Salonspa, a gift shop (a nod to Byerly’s), and deep selections of organic and natural foods. Two years later, Kowalski’s crossed the river to buy GJ’s SuperValu, a three-store south Minneapolis mid-market chain, which was quickly Kowalski-ized.

“We hired a deli person, who urged us to upgrade our deli. We did the same in bakery. We spent money to make money.”

—Mary Anne Kowalski, Owner

That growth spurt created a defined brand whose stores had a distinctive feel and sensibility. “It’s a vision of differentiation,” explains Brian Audette, now retired from leading Cub Foods after spending 35 years with its corporate parent. “They are always evolving in measured ways. They study the market, demographics.” That approach has allowed Kowalski’s to maintain market share even as Target, Walmart, Costco, Trader Joe’s, and Whole Foods came for its customers.

Jim and Mary Anne quickly spread Kowalski’s reach, buying a grocery store in Eden Prairie and opening a new store near Stillwater. Stores in Excelsior and Shoreview followed a decade later, with a location at Edina’s Southdale Center mall coming online two years ago. “[Southdale] was a huge risk,” says Mary Anne. “It was the first regional mall to host a large grocer, but people forget Southdale opened with a Red Owl inside.”

There were hiccups: An Eagan store didn’t cut the mustard, and Kowalski’s recently decided not to build on the old Sears Auto site it purchased on the Ridgedale Mall lot, instead seeking an alternate site in the west metro.

But no setback was harder than Jim’s sudden death in 2013. Mary Anne and Kris could have sold the business, but they decided to carry the family legacy forward.

Kowalski’s is not the only upscale full-service grocer in the Twin Cities, nor the only family-owned grocer, but it stands apart in key respects. Although family-controlled and without a board of directors, it operates with a civic-minded business model that includes principles of democracy and personal responsibility in every employee’s job description. Kowalski’s posts these principles in back-of-house areas of each store; it both empowers and holds team members accountable for their own work and store leadership.

Learning is paired with listening. “They listen to the consumer; they listen to their team,” says Audette. “Mary Anne, Kris, and [COO] Mike [Oase, Mary Anne’s brother] are humble, dynamic leaders.”

Kris is an only child and will one day be the sole owner of Kowalski’s. Of her four young adult children and stepchildren, only one is yet involved in the business, but the family is confident Kowalski’s has staying power. “I trust that there will be leadership that will be ready,” Kris says. If they are not Kowalskis, they will be people who have spent years learning the Kowalski’s way. So “it will be the family business, [even if] there may not always be family to run it.”

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