Dive Brief:
- In an earnings call yesterday, Safeway's chief executive officer said the company would exit the Chicago market within the next few months.
- Safeway operates 72 Dominick's stores in the Chicago area. A memo to workers said that some stores had already been sold, and that buyers were being sought for the rest. (Early last night, the owners of Jewel/Osco announced they had purchased four of the stores.)
- The announcement came as Safeway announced its earnings had been cut more than half to $65.8 million in the third quarter from $157 million a year earlier.
Dive Insight:
Dominick's has lost traction in its Chicago hometown since Safeway bought the chain in 1998. In the late 1990s, there were 130 Dominick's outlets in the Chicago area.
Our sense is that Safeway's exit means an end to the Dominick's brand. The rumored bidders for the stores are all established brands in Chicago. It's unlikely they will operate under the Dominick's flag.
