Dominick's Owner Safeway Leaving Chicago Market

The owner of Dominick's Finer Foods announced Thursday the company plans to leave Chicago by early next year.

Safeway Inc., which operates 72 Dominick's stores in the Chicago market, said in its Third Quarter 2013 report that the move comes after poor performance from locations in the area.

Dominick's incurred losses before income taxes of $13.7 million in the third quarter of 2013 and $35.2 million in the first 36 weeks of 2013, the company said.

Company officials said four stores have been sold to New Albertsons, Inc., which operates Jewel-Osco grocery stores.

The sold stores include:

  • 1340 S. Canal Street, Chicago, IL
  • 2550 N. Clybourn Avenue, Chicago, IL
  • 14200 S. Bell Road (at 143rd), Homer Glen, IL
  • 1340 Patriot Boulevard, Glenview, IL

Officials say during the transition period, the stores will continue to operate under the Dominick's banner until Jewel-Osco can complete their conversion to Jewel-Osco stores.

As many current employees as possible will be transitioned into the new Jewel stores, officials said.

The company said in a statement that exiting the market will result in a cash tax benefit of $400 million to $450 million. Safeway plans to use that money, plus proceeds from the disposal of Dominick's properties, to "buy back stock and invest in growth opportunities."

"The decision to sell Canada Safeway and to exit the Chicago market is consistent with Safeway's priority of maximizing shareholder value," President and CEO Robert Edwards said. "These actions will allow us to focus on improving and strengthening our core grocery business."

It's not clear when all of the Chicago stores will close. Safeway said it wants to exit the market by early 2014.

The announcement comes on the same week that Mariano’s opens its new store in the South Loop.

Bob Mariano, who runs the Mariano’s Fresh Markets, started at the Dominicks deli counter as a high school student. Many years later he became president of the chain. He left when Safeway bought the chain.

The bad blood between Mariano and Safeway is well documented in business journals.

In a profile in the Chicago Tribune earlier this year, Mariano said he was focused on training employees to make a dent in the divided grocery market.

In the late 1990s, Dominicks had 130 stores in the Chicago area.

Contact Us