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As Dominick’s Announces Layoffs of 5,633 with Closings, Bob Mariano’s Talks About Purchasing Some Dominick’s Locations

Sat November 09 2013 8:52 am  http://www.arlingtoncardinal.com/?p=67215
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WGN reported Friday that Mariano’s Fresh Market confirms that it may acquire some of the closing locations of Mariano’s Fresh Market. Safeway announced in October that it would be closing all of its Dominick’s stores. On October 30 Dominick’s notified the State of Illinois through the Illinois Worker Adjustment and Retraining Notification Act (WARN) that it is closing all stores on December 28, 2013 with a total of 5,633 workers affected.

According to the Chicago Tribune, about 4,000 Dominick’s workers are represented by United Food and Commercial Workers Local 1546, and about 2,000 are in UFCW Local 881. Teamsters Local 703 represents 65 drivers and 220 workers out of Dominick’s Northlake warehouse. At least Dominick’s employees in Arlington Heights have some hope, even with the Grinch-like closing of Dominick’s three days after Christmas. An Ultra grocer is opening in Prospect Heights about one-half mile east near John Hersey High School, and now there is hope that the Dominick’s at Palatine Road and Arlington Heights might be one of the strategic choices of Bob Mariano.

“We are reviewing those stores and are in the process of determining which stores could fit our strategic plan for Chicago, based on our existing network of stores and our current expansion plans for Mariano’s.”

– Bob Mariano, President (earnings call Thursday)

The news brings the question: What will move in to the Dominick’s store at 325 East Palatine Road? Will Arlington Heights have a Mariano’s North and a Mariano’s south? The Mariano’s on Northwest Highway in Arlington Heights still draws huge crowds, even after the Palatine store opened on North Hicks Road. A second Arlington Heights store could take some pressure off the over-crowding at the Mariano’s at 802 East Northwest Highway in Arlington Heights.

An opening of Mariano’s at the Dominick’s at 325 East Palatine Road would make Arlington Heights the first suburb with two Mariano’s Fresh Market locations. The Arlington Heights location, which opened in July 2010, is the location of the very first Mariano’s Fresh Market. The grocer has since built or transformed another 12 sites, and opened a total of 13 major grocery stores. Many of the locations are much larger than the Arlington Heights location.

Mariano’s moved in to a closed Dominick’s at Barrington Road and Golf Road. The Mariano’s opened in Hoffman Estates in August 2012.

Safeway Inc., the West Coast-based grocery giant that bought Dominick’s 15 years ago for $1.8 billion while Bob Mariano was CEO at Dominick’s, announced Thursday, October 10, 2013 that it plans to exit the Chicago market by early next year after market saturation in the continuously competitive Chicago grocery store market had taken in its toll on the profitability of the store. Dominick’s was founded on the west side of Chicago in 1918.

In the 1990s in north Arlington Heights-Prospect Heights area, there were once two Dominick’s within two miles of each other — one at 1241 North Rand Road and one at 325 East Palatine Road. The Prospect Heights Dominick’s closed in 2001. The 87,000 square-foot building is currently being built out at a cost of about $4.4 million to become host of a new Ultra Foods grocer — a new grocer to the northwest suburbs. Now comes news that ALL Dominick’s stores are closing in Chicagoland.

Buffalo Grove and Palatine both have two Dominick’s stores in their village limits. Naperville has three Dominick’s stores.

JPMorgan Chase & Co., which has bank branches in 53 Chicago-area Dominick’s, is in line to lose more than 10 percent of its 441 area retail locations.

Bob Mariano, current CEO of Roundy’s and founder of Mariano’s Fresh Market, developed the Dominick’s Fresh Stores in 1996 with carry-out food, specialty bakeries, delis, floral shops and in-store dining. Dominick’s grew with the introduction of “Fresh Stores”, but in 1998 after the takeover of over 100 stores by Safeway, Dominick’s stores started to phase out some of the Fresh Store concepts. Dominick’s was also faced with a scandal involving expired food in February 2011. Food and grocery blogger Jill Cataldo reported that a reader found out that some plastic-tasting meatballs that were just eaten had expired in 2007. The meatballs were purchased at the Carpentersville, Dominick’s location. Cataldo, who met with the reader and her friend, discovered hundreds of expired food items. They filled three shopping carts with 425 expired food items in two hours, and took a picture of the three shopping carts. Eventually, Dominick’s lost market share to Jewel-Osco. Prior to the Dominick’s scandal, Bob Mariano left Dominick’s and became the CEO of Roundy’s. The first Mariano’s Fresh Market store opened in July, 19 2010 in Arlington Heights. Mariano’s Fresh Market and a number of independents became strong competitors, and Dominick’s reduced their market presence currently to only 72 stores. Dominick’s market share fell from about 30 percent in the late 1990s to under 10 percent by 2012.

Safeway operates about 1,400 stores in the U.S. and 223 in Western Canada. Thursday, as they announced the sell-off of Dominick’s, Safeway reported third-quarter net income fell from $157 million last year to $65.8 million this year. The Dominick’s unit lost $13.7 million before taxes, so far this year

Jewel-Osco, the Chicago market share leader at about 30 percent, has been sold three times in the last 13 years. The current owners are Cerberus Capital Management and a group of real estate firms — Chicago’s Klaff Realty LP, New York-based Kimco Realty Corp., Philadelphia’s Lubert-Adler Partners LP and Schottenstein Real Estate Group in Columbus, Ohio. Locally, they immediately started remodeling the Vail Street Market Jewel-Osco at 122 North Vail Avenue in Arlington Heights. Jewel-Osco has also eliminated self-checkout and the Preferred Card. Internally, the new owners say they are doing away with blanket-policy marketing and will base coupon policies on local stores — treating each store as if it is their only store. Some experts think this might cause confusion across markets.

Four Dominick’s stores have already been sold to the Cerberus group, and will open as Jewel-Osco stores soon in the City of Chicago. A Jewel-Osco, Trader Joe’s, Harvest Fresh, Aldi’s and a new Ultra foods opening soon at the former Dominick’s location in Prospect Heights already saturate the area of Uptown Arlington Heights near the Arlington Heights Road-Palatine Road-Rand Road triangle. That’s not likely to scare large grocers away.

Whole Foods Market moved west from Arlington Heights and Palatine on March 5, 2013 — closing the Palatine store, and locating near Deer Park Town Center with the nearest dense population in Lake Zurich. That move leaves the closest Whole Foods Market stores to Arlington Heights in Kildeer, near Deer Park, and in Schaumburg, just south of Woodfield. It seems likely that Whole Food’s Market would take a serious look at the Arlington Heights Dominick’s location, as well. Will Mariano’s and Whole Foods be the main contenders for the strategic Arlington Heights Dominick’s location? While Mariano’s has been a winner from the start, there are a lot of people that would love to see a Whole Foods Market in Arlington Heights.

As of November 9, 2013 Mariano’s has the following locations …
Mariano’s/StoreLocator

Arlington Heights
Chicago – Jefferson Park
Chicago Lakeshore East
Chicago – Roscoe Village
Chicago – South Loop
Chicago – West Loop
Elmhurst (huge location with large, busy dining area)
Frankfort
Harwood Heights
Hoffman Estates
Palatine
Vernon Hills
Wheaton


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2 Responses to “As Dominick’s Announces Layoffs of 5,633 with Closings, Bob Mariano’s Talks About Purchasing Some Dominick’s Locations”

  1. Coppington says:

    The expired food issue is interesting. I have also found expired food at Target, Jewel and Dominicks. Just recently, I found several hams that were several days past their date at Jewel, and notified the butcher.

    To their credit, I have heard about stock clerks being fired at Jewel for not rotating stock. When I worked at K-Mart years ago, they were selling Halloween candy several months past the date…managers were told about it by peon stock clerks to no avail.

    I always check dates of merchandise nowadays…can’t depend on someone else to do it. Some of these food expiration dates are somewhat flexible, but expired meat/fish/poultry really scares me!

  2. jeepguy says:

    I heard Food Network is supposed to be taping something at the Arl Hts store this morning.

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