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Safeway To Sell Off Dominick’s Stores In Chicago Market

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(CBS) – The parent company of the Dominick’s supermarket chain on Thursday announced plans to sell as many of the stores it can before exiting the Chicago market entirely by early 2014.

Safeway Inc. says it wants to concentrate on regions where its business is stronger and hopes to raise up to $450 million in tax benefits. It noted the Dominick’s chain of 72 stores — founded locally by the DiMatteo family nearly 100 years ago — lost $17.5 million in the third quarter of 2013.

“We anticipate that Dominick’s will be accounted for as a discontinued operation in the fourth quarter of 2013,” Safeway said in a news release.

In a conference call Thursday afternoon, Safeway President and CEO Robert Edwards said the company seeks to quickly sell all or as many of the Dominick’s stores as possible. To that end, Safeway announced it has already sold four of the Dominick’s stores to New Albertsons, Inc., which owns Jewel-Osco.

The four stores are located at 1340 S. Canal St. and 2550 N. Clybourn Ave. in Chicago; 14200 S. Bell Road (at 143rd), Homer Glen; and 1340 Patriot Boulevard in Glenview. It’s possible many Dominick’s employees will remain under the new owner, Safeway said.

It wasn’t immediately clear what — if anything, including the name — will be left behind of the Dominick’s legacy. Shoppers were stunned.

“It’s kind of sad because I used to go to Jewel, and I found that they have a lot more product than Jewel did,” says Rachel Bruttell, who just received a Dominick’s Club Card.

Edwards said Safeway’s decision to leave the Chicago market “is consistent with Safeway’s priority of maximizing shareholder value.”

Kenneth Boyd, president of Local 1546 of the United Food & Commercial Workers International Union, says the announcement came as a surprise. The UFCW currently represents 4,000 members who now work at Dominick’s stores. More than 6,000 people in total are believed to work for the chain.

“They are going to try to sell whatever they can over the next three to four months. What they cannot sell after that we hear they will then close whatever.  … It’s not going to be one big sale to one big company,” Boyd tells WBBM Newsradio’s John Cody.

Boyd says it’s going to be an expensive exit for Safeway, which will have to pay hundreds of millions of dollars owed the pension fund for Dominick’s workers.

Safeway is based in Pleasanton, Calif. and operates 1,400 stores across the U.S.

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