Dominick’s owner pulling out of Chicago

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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.

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