Dominick's Supermarkets feeds residents of the Windy City. The company is the second-largest supermarket operator in the metropolitan Chicago area (behind SUPERVALU-owned Jewel-Osco). Dominick's has about 75 stores (from a peak of 130 in the late 1990s), including more than 50 large Lifestyle-format stores with upscale deli and bakery departments and expanded produce areas, floral departments, and in-store cafes. The rest are mostly conventional supermarkets. Dominick's also operates a commissary that produces its prepared foods. With roots in Chicago since 1918, Dominick's is a division of supermarket giant Safeway. Under Safeway's owership the chain has shrunk and lost considerable market share.
Safeway doesn't break out sales for its individual grocery chains. Prior to its purchase by Safeway in 1998, Dominick's numbered about 130 stores and $2.6 billion in sales. However, since then the Chicago grocery chain's market share has declined from 28% to about 10%. (By comparison archrival Jewel-Osco enjoys a commanding 30% share of the market.)
Historically, Chicago was a two chain market, with Dominick's and Jewel-Osco dominating the grocery landscape and charging relatively high prices. (Both chains employ unionized workers.) But that has changed as new competitors, including non-unionized Wal-Mart Supercenters and limited assortment ALDI, entered the market and exerted downward pressure on prices. To compete, Dominick's launched an "everyday lower prices" program and a digital coupon program called Just For U. (Just For U, which appears as an icon on Dominicks.com, leads shoppers into a portal where they can download savings from numerous manufacturers and in-store deals onto their Fresh Values loyalty cards.) To compete at the high end of the market, Dominick's has been busy remodeling stores to conform to its successful Lifestyle format, which is designed to compete with more upscale operators, such as Whole Foods and Mariano's Fresh Market (owned by Roundy's Supermarkets). Turmoil at Jewel-Osco's parent company SUPERVALU could lead to the sale of the company's biggest rival, creating a potential opportunity for long-suffering Dominick's if parent Safeway choses to invest.
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