Dominick's

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Dominick's
Grocer, Subsidiary of Safeway Inc.
Industry Retail (Grocery)
Founded 1918 (1918) (Chicago, Illinois)
Founder Dominick DiMatteo
Defunct December 28, 2013 (2013-12-28)
Headquarters Oak Brook, Illinois
Products Bakery, dairy, deli, frozen foods, general grocery, meat, pharmacy, produce, seafood, snacks, liquor
Subsidiaries Omni Superstore

Dominick's was a Chicago-area grocery store chain and subsidiary of Safeway Inc.. Dominick's distribution center was located in Northlake, Ill.,[1] while its management offices were located in Oak Brook, Ill..[2][3]

History[edit]

Founding[edit]

Dominick DiMatteo, born in Sicily, founded the chain in 1918. The second Dominick's opened in 1934. In 1950, the DiMatteos opened their first supermarket, a 14,000-square-foot (1,300 m2) store.[4]

Expansion[edit]

By 1968 the chain had reached 19 stores. The family elected to sell their store to the Cleveland company Fisher Foods.[5] The DiMatteos continued to operate the chain under the financial backing of Fisher Foods. Under Fisher, Dominick's acquired 24 stores plus a 462,000-square-foot distribution center in Northlake from Kroger in two separate transactions in 1970.[6][7] The new acquisitions from Kroger increased the number of stores to 45. The Northlake distribution center, which was original built by Kroger in 1961,[8] was used by Dominick's until the chain was closed in 2014.[9]

By the 1980s the family had become unhappy with the agreement and bought back the chain in 1981 for $100 million.[4][10] The DiMatteos continued to expand and had acquired 4 stores from Kohl's[11] and 16 stores from Eagle in 1982 and 1985 respectively.[12]

In 1986, Dominick's experiment with a discount grocery store concept called Jerry's Deep Discount Centers with just 3 units, but the experiment was terminated after a few months of operation.[13]

Store design during Dominick's heyday[edit]

In the 1980s and early 1990s, Dominick's experimented with new large "food and drug" combo stores. Dominick's was one of the first to experiment with exposed-ceiling sales areas, exposed structural elements such as piping and HVAC ducts, large-scale state-of-the-art telephone systems and POS systems, video departments, one-hour photo, bulk foods, and many other "new" 1980s concepts.[14]

In the 1990s, Dominick's took the "food and drug" combo to the next level with the introduction of the Dominick's Fresh Store in 1993.[15] The Dominick's "Fresh Store" introduced prepared foods, in-store restaurants/cafés, Starbucks cafés, soft lighting, upscale subtle graphics, uniform products signage, and a general European Market feel to the Dominick's stores. During the late 1990s, the Fresh Stores were the main expansion model for Dominick's and was rolled out to all new stores including former Omni Superstores, up until the purchase by Safeway.

Safeway bought Dominick's in 1998 and put an abrupt halt to the Fresh Stores, instead rolling out their own prototype with the Fresh Store logo on the outside of the store.[16] Safeway still put "The Fresh Store" cursive logo on the outside of the stores, and in many stores, the Fresh Store concepts such as cafés, fresh prepared foods and European store layout format were continued. Safeway implemented its own store layouts as stores were remodeled, and their own house brands such as Safeway Select.

1990s: Takeovers[edit]

In 1993, Dominick DiMatteo, Jr. died from lung cancer.[17] According to the local press, his daughters and son did not have the same passion for the supermarket business. There was corporate infighting that also contributed to the family selling the chain. It took three years before the company was sold to a Los Angeles-based grocery investment firm headed by Yucaipa Companies.[18][19]

In 1998, the chain's then 116 stores were acquired by Safeway Inc.[20] Safeway soon began to sell its own private-label brands at Dominick's locations, replacing Dominick's former private-label brands. According to a grocery business consultant, "Dominick’s focused on purchasing produce and meat on quality first, price second. Safeway did just the opposite."[16] Dominick's lost market share and profits following the Safeway takeover. Safeway tried to imitate the model that had been successful in California, but Chicago's strong ethnic background did not mesh well with the California shopping experience. Between 2002 and 2007, Dominick's market share in the Chicago region declined from 24.4 percent to 14.5 percent (Jewel-Osco's 40.5 percent was the market's leader).[21] Safeway unsuccessfully attempted to sell the Dominick's chain in 2003.[22] Safeway then reported Dominick's financial information as a discontinued operation,[23] but later, Safeway announced that it was retaining the chain.[24]

After closing more than 20 stores since its acquisition, Safeway announced in February 2007 that it would close another 14 stores in the Chicago area and convert 20 existing stores to the lifestyle format.[25][26] After these store closings, Dominick's operated in 83 locations until they were closed on December 28, 2013.

Omni Superstore[edit]

Omni Superstore, Schererville, IN, 1991: canopy for loading groceries
Main article: Omni Superstore

In 1987, the chain opened Omni Superstore locations,[13][27] which were "warehouse-style" supermarkets to stave off Cub Foods supermarkets. Besides traditional food items, these stores featured non-food items, movie rental stores, and bulk items. The stores' design was stark in comparison to Dominick's and featured cost-cutting techniques.

These stores began to lose money due to lack of loss prevention and throwaway inventorying. Around 1996 then-owner Yucaipa decided to convert them to the Dominick's "Fresh Store" concept. Omni Superstores were converted to Dominick's Stores in 1997.[28][29]

After Dominick's was acquired by Safeway, some locations were closed. The Clybourn Avenue Dominick's in Chicago was the only remaining Omni Superstore building which was occupied by Dominick's until the store was closed on December 28, 2013.

Brands[edit]

After being acquired by Safeway, Dominick's private-label brands varied between those branded for Safeway (such as "Safeway Select" and "O Organics") and ones branded for Dominick's.

Lifestyle branding[edit]

On April 18, 2005, Safeway, Dominick's parent company, began a $100 million brand re-positioning campaign labeled "Ingredients for Life". Although the campaign was used in the Chicago area, the "Ingredients for Life" slogan was still positioned with the store's logo as in Safeway's other divisions (i.e. at the end of commercials and on billboards Dominick's logo was flashed combined with the slogan). Under this campaign many Dominick's were remodeled to the new format. Lifestyle stores featured more upscale trends than on Dominick's last re-branding, "Fresh Stores", such as an olive bar, carving station, Starbucks, and a salad bar.[30] Architectural changes included hardwood flooring and new direct lighting schemes that tend to be less abrasive. The first Dominick's to be branded a Lifestyle store was in Northfield[19][31] which opened after closing 12 poorly-performing stores.[32] Safeway later spent an additional $150 million in upgrades to the Lifestyle brand.[33]

Banking[edit]

After seeing the success that their Omni division had with their in-store banking partnership with St. Paul Federal Bank since 1988,[34] Dominick's formed an agreement with First Chicago Corp. in 1993.[35] Until final closure in 2013, many Dominick's featured in-store bank locations and ATMs of First Chicago's successor, Chase.[4]

Sales of Expired Food Controversy[edit]

On February 17, 2011 CBS Chicago News aired a report[36] picked up on from Chicago blogger Jill Cataldo[37] about a widespread issue with the sale of expired products in Dominick's stores. Legions of Dominick's customers had apparently been contacting Dominick's about these issues for some time to no avail. In two separate shopping trips to two different Dominick's stores, Ms. Cataldo, along with two of her readers, documented over 700 expired items on the store shelves, some more than 2 years past their expiration dates.[38]

On that same day The Chicago Tribune featured an article[39] on the Dominick's expired-food issue. In that article, Safeway, as parent company of Dominick's, released the following statement to the media: “Dominick’s customers rightly expect they will find only high-quality, fresh products at all of our stores. Our organization is committed to meeting those expectations. While expiration dates on food products are largely based on quality, not food safety, that does not diminish the fact that we are displeased with the out-of-date products found at our stores. This is not indicative of how we do business. A high-level and highest-priority team has been assembled to immediately address these issues.”

Reports of shoppers witnessing Dominick's employees in the aisles of their stores filling carts with expired products began popping up in the comments sections of these articles.

On February 18, 2011 various Chicago market media outlets also ran reports on this problem including NBC Chicago,[40] WGN Morning News[41] and WBBM AM Radio.

Scores of customers had taken to the Dominick's Facebook page demanding answers about the volume of expired products on their shelves, but Dominick's remained silent on the issue prior to Ms. Cataldo's blog posts and the subsequent media coverage.

Store Closings[edit]

Over time, Dominick's closed stores due to lack of sales and overall poor performance. In 2011, three locations were closed in Orland Park, Oak Lawn, and Carpentersville. In 2012, stores were closed in Hoffman Estates, Vernon Hills, North Chicago and Bloomingdale. Most employees were either transferred to different stores or offered a severance package.

It was announced that most Dominick's stores would be closed in the Chicago area by December 28, 2013.[42] The announcement has spurred its competitors into seeking out employees and store locations that they could expand into once Dominick's exits the market.[43] On December 2, 2013, Milwaukee-based Roundy's, which operates under the Mariano's Fresh Market brand in the Chicago market and is chaired by former Dominick's CEO Bob Mariano, announced the purchase of eleven stores in the chain, though employees would have to re-apply to work for Roundy's.[44]

In December 2013, Dominick's employee Steve Yamamoto was suspended one day prior to his store closure date for having published a satirical, science-fiction themed video on the closure.[45]

One location remained open in Bannockburn, Illinois until January 25, 2014, and another in Westchester, Illinois, until January 28.[46] Whole Foods purchased 7 of the closed locations in 2014.[47]

References[edit]

  1. ^ "Distribution Centers" (PDF). Safeway Inc. Retrieved May 13, 2010. [dead link]
  2. ^ Gallun, Alby (June 17, 2002). "Dominick's losing its local flavor". Crain's Chicago Business. Retrieved December 23, 2009. 
  3. ^ Hoover's Masterlist of Major US Companies, A-Z. Hoover's. 2005. ISBN 9781573111072. OCLC 62147766. Retrieved 14 February 2011 – via Google Books. DOMINICK'S FINER FOODS, INC. 711 Jorie Blvd. Oak Brook, IL 60523 
  4. ^ a b c "Dominick's Finer Foods, LLC". Answers.com. [dead link]
  5. ^ "Fisher-Fazio and Dominick's Agree to Merge". Chicago Tribune. May 14, 1968. p. C7.  Alternate Link via ProQuest.
  6. ^ "Seven Kroger Units Bought By Dominick's". Chicago Tribune. July 18, 1970. p. B7. Dominick's Finer Foods Stores has completed purchase of a 462,000-square-foot Kroger distribution center...and six Kroger retail supermarkets. The acquistion of the six retail outlets will bring the number of stores operated by Dominick's to 27.  Alternate Link via ProQuest.
  7. ^ "Dominick's Buys 18 Kroger Food Stores". Chicago Tribune. November 13, 1970. p. C11. Dominick's Finer Foods has announced it bought 18 more Kroger stores, to increase its food chain to 45 stores. Dominick's purchased Kroger's Northlake distribution center and several other stores.  Alternate Link via ProQuest.
  8. ^ "Begin Kroger Expansion In Chicago Area: Distributor Unit, Store Started". Chicago Daily Tribune. June 23, 1960. p. b5. Kroger company Wednesday broke ground for a giant distribution center in Northlake from which it will service 67 Chicago area stores. The distribution center, on a 55 acre site in Northlake industrial district, will have 10-1/2 acres of warehousing facilities and offices under one roof. The structure is scheduled for completion late in 1961.  Alternate Link via ProQuest.
  9. ^ Matthews, David Lee (August 13, 2014). "Developer plans $90 million warehouse project on Dominick's site". Crain's Chicago Business. Pleasanton, California-based Safeway Inc., which sold the property, exited the Chicago market last year and closed its 72 Dominick's stores here. At least 28 stores were still vacant as of yesterday. 
  10. ^ "Dominick's is sold to its former owner". Chicago Tribune. December 31, 1981. p. B2. The operation has grown from 17 stores in 1968 to 71 stores today.  Alternate Link via ProQuest.
  11. ^ Lazarus, George (April 22, 1982). "Scot Lad Foods eyes purchase of Butera". Chicago Tribune. p. b6. Butera recently sought unsuccessfully in acquiring four stores of the Kohl's Food Stores Chicago area operation but those units were picked up by the Dominick's chain. Kohl's eight other Chicago area stores were sold to Eagle.  Alternate Link via ProQuest.
  12. ^ Lazarus, George & Gorman, John (May 24, 1985). "Dominick's To Purchase 16 Eagle Food Stores". Chicago Tribune. 
  13. ^ a b Lazarus, George (February 24, 1987). "Dominick's Won't Keep Jerry's Afloat". Chicago Tribune. 
  14. ^ Pegler, Martin (1989). Market, Supermarket & Hypermarket Design. Retail Reporting Corp. ISBN 9780934590334. OCLC 21565944. 
  15. ^ Ryan, Nancy (November 14, 1993). "Dominick's Takes Stab At Takeout". Chicago Tribune. 
  16. ^ a b Jargon, Julie (2005-12-16). "Safeway's mistakes offer lesson for new Jewel owner". Crain's Chicago Business. 
  17. ^ Heise, Kenan (November 9, 1993). "Dominick Dimatteo Jr.: Built Supermarket Chain". Chicago Tribune. 
  18. ^ Lazarus, George (February 3, 1995). "California Giant To Snap Up Home-grown Dominick's: Old-line Family Firm To Bring $500 Million". Chicago Tribune. 
  19. ^ a b Duff, Mike (March 28, 2005). "A taste of Calif. lifestyle in Dominick's Chicago stores". DSN Retailing Today. Retrieved December 28, 2013. [dead link]
  20. ^ Bigness, Jon (October 14, 1998). "For Dominick's, Sale A New Start: $1.85 Billion Safeway Deal May Fuel Growth". Chicago Tribune. 
  21. ^ Schmeltzer, John (February 13, 2007). "Roundy's joins Chicago grocery fray". Chicago Tribune. Retrieved December 28, 2013. 
  22. ^ Goll, David (March 7, 2005). "Talk of Safeway sale of Dominick's gets louder". East Bay Business Times. Retrieved December 28, 2013. 
  23. ^ "Safeway Inc., Form 10Q". Securities and Exchange Commission. May 6, 2003. Retrieved December 28, 2013. 
  24. ^ Knowles, Francine (May 5, 2007). "Safeway has no intention to sell Dominick's chain". Chicago Sun-Times. Archived from the original on 2007-09-30. Retrieved December 28, 2013. 
  25. ^ Yue, Lorene (February 2, 2007). "Dominick's to close 14 local stores". Crain's Chicago Business. Retrieved December 28, 2013. 
  26. ^ Manor, Robert (February 3, 2007). "Dominick's to close 14 area stores by April". Chicago Tribune. Retrieved December 28, 2013. 
  27. ^ Van Vynckt, Virginia (April 16, 1987). "Omni offers (nearly) all things to shoppers". Chicago Sun-Times. p. 7. (subscription required (help)). Imagine an all-night drugstore, department store, supermarket, specialty shop and deli under one roof. That's the idea behind Omni, an 86,000-square-foot superstore opened by Dominick's Finer Foods last week in southwest suburban Orland Park. 
  28. ^ Millman, Nancy (October 10, 1997). "Dominick's Omni Stores Go Upscale: 'Fresh' Stores Offer Consumers More To Choose From, Such As Deli Counters And Cafes, And May Give Firm Higher Margins". Chicago Tribune. 
  29. ^ Podmolik, Mary Ellen & Cruze, Tom (October 10, 1997). "Omni off Dominick's menu - Chain plans conversion to 'fresh stores'". Chicago Sun-Times. p. 59. (subscription required (help)). Dominick's Supermarkets Inc., announced plans Thursday to do away with its 17 Omni discount food stores and convert most of them to Dominick's "fresh stores" by next summer. For Dominick's, the switch is likely to further increase profit margin. The renovated "fresh stores," introduced in 1994 with trendy food products and a wider selection of produce, have been extremely popular with customers. 
  30. ^ Schmeltzer, John (March 3, 2006). "Dominick's wants slice of the high-end market: New city store puts emphasis on easy, fresh prepared foods". Chicago Tribune. 
  31. ^ Schmeltzer, John (December 24, 2005). "Squeeze of the supercenter: New players bite into market share of traditional grocers". Chicago Tribune. 
  32. ^ Alexander, Delroy (March 5, 2005). "Roundy's may again look to buy Dominick's". Chicago Tribune. 
  33. ^ Hughlett, Mike (March 31, 2008). "Dominick's sets 'lifestyle' goals: Supermarket chain is spending more than $200 million remodeling sites, proof that it is not for sale, store says". Chicago Tribune. 
  34. ^ "St. Paul Bancorp Inc., Parent of St. Paul Federal Bank for...". Chicago Tribune. October 18, 1988. 
  35. ^ Stangenes, Sharon (May 13, 1993). "1st Chicago Branches At Dominick's". Chicago Tribune. 
  36. ^ "Mom Blogger Finds Cartloads of Expired Date Food At Popular Grocer". CBS Chicago. February 17, 2011. 
  37. ^ Cataldo, Jill (February 18, 2011). "Expired Food at Dominick's First In A Series". JillCataldo.com (blog). 
  38. ^ Cataldo, Jill (February 18, 2011). "Expired Food at Dominick's Second Second In A Series". JillCataldo.com (blog). 
  39. ^ Karp, Gregory (2011-02-18). "Outdated Items At Dominick's Angers Customers". Chicago Tribune.com. 
  40. ^ Elich, Jaime. "Angry Customers Complain Dominick's Sold Them Expired Items". NBC Chicago. 
  41. ^ "Dominick's Addresses Expired Food Concerns". WGN TV. [dead link]
  42. ^ Pathieu, Diane (December 28, 2013). "Dominick's stores close doors at noon Saturday across Chicago". ABC7Chicago.com. Retrieved December 28, 2013. 
  43. ^ Channick, Robert (October 16, 2013). "Jewel to keep workers from 4 Dominick's stores it's acquiring". Chicago Tribune. Retrieved January 4, 2014. 
  44. ^ Channick, Robert & Bomkamp, Samantha (December 2, 2013). "Mariano's owner Roundy's buying 11 Dominick's stores". Chicago Tribune. Retrieved December 3, 2013. 
  45. ^ Graef, Jon (December 28, 2013). "Suburban Dominick's Employee Suspended On Last Day For Satirical YouTube clip". Chicagoist. Retrieved December 31, 2013. 
  46. ^ Channick, Robert (December 28, 2013). "Final closing time for Dominick's on Saturday". Chicago Tribune. Retrieved January 4, 2014. 
  47. ^ Channick, Robert (February 3, 2014). "Whole Foods confirms plan to buy 7 former Dominick's stores". Chicago Tribune.