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The parent company of Dominick's, Safeway, Inc., said yesterday Dominick's will leave the Chicago market by 2014.
There are currently 72 Dominick's stores in the Chicago area and their fate is uncertain. Most of the real estate that the locations stand on is leased; Safeway only owns about 20 of the buildings. The company is hoping to sell as many stores as possible; it's likely that multiple buyers will be involved.
"We'd love to find a buyer for 72 stores, but it probably will play out in pieces," said Safeway President and CEO Robert Edwards. Edwards also said he is "highly confident" that the company will be able to find buyers.
In the first nine months of this year, the Dominick's unit of Safeway lost $13.7 million.
According to the Chicago Tribune, Dominick's currently holds an 8.7 percent market share, ahead of Costco's 7.3 percent but well behind Jewel's 29.1 percent. Dominick's share of the market has been decreasing steadily for years. The move out of Chicago is expected to save Safeway as much as $450 million; according to the company, the Chicago stores are the lowest performing in the entire country.
Naperville is home to two Dominick's locations; City Manager Doug Krieger said, "We went through something similar during the Eagle bankruptcy a few years ago, and it would be our hope that new tenants would fill those existing locations [so] there wouldn't be a significant impact to the city. It's going to be in Dominick's best interest to conduct an orderly sale and transition, and therefore I don't think the direct financial impact to the city would be significant."
SOURCE: Chicago Tribune