Local News

Dominick’s owner pulling out of Chicago

The owner of Dominick’s groceries announced Thursday it’s leaving in the new year– leaving thousands of workers facing an uncertain future.

Dominick’s was founded in Chicago in 1918 and sold to California-based Safeway in 1998 in a nearly $2 billion deal. Now, Dominick’s is done, and to those in the know it’s not a huge surprise.

Brigid Sweeney, Crain’s Chicago Business: “They have not been doing well. They’ve been getting hammered on both ends by discounter, by Target, by Walmart—[stores] who’ve been increasing their groceries.”

Surrounded on all sides by competition, in some cases low-priced, like this new target, blocks from the old Dominick’s in river north.  But it’s also high-end, customer-focused upstart, highly-successful newcomer Mariano’s has taken a big bite.”

So Safeway said “enough,” as it reported a big drop in third-quarter earnings. Dominick’s alone lost nearly $14 million.

In a statement released late Thursday, the company said

“Over the years we have worked hard to strengthen Dominick’s position in the Chicago market. While we have made some progress, it has not been enough to justify further investment.”

Brian Dowling, Safeway, Inc., Pleasanton, CA: “It’s says something about the competitive nature of the business, it’s a small margin business. We have remodeled stores, we’ve opened new stores, we’ve improved our price position.”

The union representing workers here sees it way differently, a case of a big corporation putting revenues and share price ahead of people.

Eric Bailey, United Food and Commercial Workers Union: “When Safeway came in and they took over, they had this attitude that they were gonna teach people in Chicago how to shop. You don’t come into a community and change the way people do things. That’s not the Chicago way.”

As for the fate of these stores as of this minute, four of them have been sold.  Safeway says it hopes to sell them all.

VIEW & ADD COMMENTS

18 Comments to “Dominick’s owner pulling out of Chicago”

    Hal said:
    October 10, 2013 at 6:08 PM

    You can't blame them, it's too expensive to do business in Chicago, with Chicago taxes, Chicago gas and Obama care.

    anotherpov said:
    October 10, 2013 at 6:57 PM

    It's very expensive to be a consumer in Chicago – high sales tax, you bet, but those are pass through to the customers, store owners don't care – why does Safeway care about gas? I guarantee that all the diesel their trucks burn is purchased on counties around Chicago – definitely NOT in Cook country, and Obamacare? Tell ya what, go ahead and blame it for economic impact ONCE IT GOES INTO EFFECT -sheesh…….. back to the article. . .
    I don't get it – never been in my local Dominick's when the aisles weren't full of customers, will really miss them if they pull out of Chicago completely – talk about turning areas of Chicago into real food deserts.

    spiris333 said:
    October 11, 2013 at 6:53 AM

    The liberal agenda of high taxes and irresponsible government is taking it's toll in Illinois, and we wonder if chicago will be the next detroit. Businesses are fleeing the state and you cannot blame them, as the democrats have ruined that city and state.

    Gsinclair said:
    October 11, 2013 at 7:00 AM

    Dominick’s deserves their problems – They spent too much on fancy stores, had terrible service and their prices were horrible.

    aabbabab said:
    October 11, 2013 at 7:07 AM

    Dominicks sold to Safeway because of the union. Illinois is the only state Safeway is plagued by the union. The Union will ruin anything good in Illinois; just ask Michigan.

    keeping real said:
    October 11, 2013 at 9:34 AM

    capitalism at it best!!!! morons!!! Obama care has nothing to do with close of that high prices store!!

    Andrea said:
    October 11, 2013 at 9:40 AM

    now the unions canbe happy…Walmart will take over more of the retail food business..no unions there!

    jim said:
    October 11, 2013 at 10:17 AM

    As o former Safeway associate, I can attest that it IS the unions that are driving Dominick's out of Illinois, and no one can blame them, as the tyranny and opression of the unions, coupled with the corruption of the co-conspirator democrat party are far too mjuch for almost any business to endure, in the next few years wath the major companies in Illinois flee to texas and other good right-to work states, as democrats ALWAYS leave devastation in their wake…….maybe just MAYBE if enough decent people wake up in Illinois and throw EVERY democrat out of office, Illinois MIGHT have a chance for a return to prosperity….if not we will soon emulate Detroit!

      Anonymous said:
      October 11, 2013 at 7:16 PM

      As a current safeway associate, I can attest that it is not the unions driving safeway out of illinois, it is safeway’s failed sales tactics, replacement of products chicago loved with corporate brands, and awful treatment of employees. Tyranny and oppression came from safeway, not the unions.

      Fyi jewel has the same union and theyre doing fine, taking over 4 of the dominick’s stores in fact.

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