End of the Road for Dominick's

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End of the Road for Dominick's

By Jim Dudlicek, EnsembleIQ - 10/10/2013

I can't say that it was a complete surprise to hear of Safeway's decision to pull out of the Chicago market after its 15-year attempt to make a go of Dominick's.

But I can say the news came with some sadness. I grew up in the Chicago suburbs, and my family became regular Dominick's shoppers after one opened close enough to home to make straying from our neighborhood Jewel a convenient option. As an adult, I remained loyal to the banner, even as ownership passed from the DiMatteo family to Safeway (by way of Yucaipa), even as longtime local customers expressed their discontent with changes to the stores and lack of availability of some of their favorite brands.

But even with its own management style and its own strong private brand programs, Safeway sadly never seemed to maintain a firm grasp on what the banner meant to the old guard. Indeed, "I told you sos" dominated much of the social media chatter in response to the news, and complained of a lack of quality and customer service. Declining revenues and a growing number of closed stores reflected consumer response.

So what's next for Dominick's?  It seems unlikely at this point that the banner name will survive; several locations already are slated to be turned over to market-leading Jewel-Osco, itself under recent new ownership. I would expect the rest of the chain to go the way of Genuardi's - it'll likely be divvied up among other players looking for a bigger share of Chicagoland's grocery dollar, in particular Mariano's, which is expanding aggressively throughout the Chicago area and has a store in at least one former Dominick's location (I know because it's my own neighborhood store), and is run by Bob Mariano, Dominick's last pre-Safeway CEO.

It'll be a shame to see the Dominick's name - which dates back to 1918 - vanish from the Chicago grocery scene, and it's a shame to see Safeway retreat in defeat from a major market, now even more fragmented than when it arrived a decade and a half ago.

And the cutthroat competition continues ...