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Dominick's Lays off 500

CHICAGO - Just weeks after resolving a labor dispute that threatened to shutter all 113 of its stores, Safeway-owned Dominick's fired 500 of its nearly 13,000 workers, The Associated Press reports.

Wynona Redmond, a spokeswoman for the Chicago-based supermarket chain, blamed sluggish sales on Thursday's layoffs. Dominick's also said it would close a struggling store in East Chicago in January.

Redmond declined to comment on speculation that as many as 20 stores might be closed after the holidays.

Pleasanton, Calif.-based Safeway Inc. bought the Chicago-area chain in 1998 for $1.2 billion but now is looking to sell it.

Dominick's three-year contract with the United Food and Commercial Workers union expired Nov. 9, and Safeway threatened to shut down the chain if it was unable to restructure labor agreements to bring stores in line with contracts at Jewel Food Stores, its prime competitor in Chicago.

The company said it needed to rein in labor and health care costs.

Workers refused, but on Nov. 19 both sides agreed to extend the contract for eight months while Safeway tried to find a buyer for the chain.

Potential buyers include Minneapolis-based SuperValu Inc. and Cincinnati-based Kroger Co.
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