Dominick's

Dominick's

Dominick's is a grocery store chain with chains mainly in the Chicago area, Illinois, USA. Dominick's distribution center is located in Northlake while their management offices are located in Oak Brook.


History

Founding

Dominick DiMatteo founded the chain in 1918. It was started as a regular neighborhood store, with fresh foods. Employees and customers were even on a first-name basis with each other. The second Dominick's opened in 1934. In 1950 the DiMatteos opened their first supermarket, a 14,000 square foot store.[1]


Expansion

By 1968 the chain had reached 19 stores. The family elected to sell their store to the Cleveland company, Fisher Foods. The DiMatteos continued to operate the chain under the financial backing of Fisher Foods. By the 1980s the family became unhappy with the agreement and bought back the chain for $100 million.[1] The DiMatteos took no time to continue expansion and acquired Kohl and Eagle stores.


Store design during Dominick's heyday

During the 1980's and early 1990's, Dominick's experimented with new large "food and drug" combo stores. The stores often differed from Dominick's large Chicago area competitor Jewel-Osco, in the fact that Dominick's was 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" 1980's concepts.

During the 1990s, Dominick's took the "food and drug" combo to the next level with the introduction of the Dominick's Fresh Store, under the direction of then CEO Bob Mariano. The Dominick's "Fresh Store" introduced prepared foods, in store restaurants/cafes, Starbucks cafes, soft lighting, upscale subtle graphics, uniform products signage, and a general European Market feel to the Dominick's stores. During the late 1990's, 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 Bob Mariano styled Fresh Stores and instead rolled out their own prototype with the Fresh Store logo on the outside of the store. Even though Safeway still put "The Fresh Store" cursive logo on the outside of the stores, the Fresh Store concepts such as cafes, fresh prepared foods and European store layout format were phased out in favor of Safeway's own store layout and house brands such as Safeway Select. This caused many customers to stop shopping at Dominick's. Only lately, has Safeway regained market share with Dominick's by their introduction of the new "Lifestyle Format" which greatly reflects many of the concepts of the former Fresh Stores Bob Mariano created in the 1990's. [2]


1990s: Takeovers

In 1993, Dominick DiMatteo died. 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 Co.[3] Starting in 1996, Dominick's "Fresh Stores" were developed by then president Bob Mariano, and stores starting having various new services, such as carry-out food, specialty bakeries, delis, floral shops, and in-store dining. The stores were a hit and made higher profits than traditional supermarkets.
In 1998, the chain's then 116 stores were acquired by Safeway Inc. Safeway soon began to push Safeway private-label products and eliminated local known brands. According to Jim Hertel of grocery consultancy Willard Bishop Consulting Ltd., "Dominick’s focused on purchasing produce and meat on quality first, price second. Safeway did just the opposite."[4] Dominick's lost market share and profits following the Safeway takeover. 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 is the market's leader.[5] During labor negotiations in 2003, Safeway unsuccessfully attempted to sell Dominick's,[6] and reported Dominick's financial information as a discontinued operation,[7] but, more recently, Safeway announced that it was retaining the chain.[8]

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.[9] After the store closings, Dominick's operates 83 locations.


Omni Superstore

In 1987, the chain opened Omni Superstore locations, which were "warehouse-style" supermarkets to stave off Cub Foods supermarkets. Besides traditional food items, these stores featured non-food items, movie rentals 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.

After Dominick's was acquired by Safeway some locations were closed. Crestwood, McHenry and Clybourn Avenue Dominick's in Chicago are the only remaining Omni Superstore buildings now occupied by Dominick's.


Brands

Dominick's private label brands vary between those branded for Safeway and ones branded Dominick's. Safeway's most notable private label is Safeway Select. In 2006 Safeway released a private brand of organics named "O Organics".


Lifestyle branding

On April 18, 2005, Safeway, Dominick's parent company, began a 100 million dollar brand re-positioning campaign labeled "Ingredients for life". Although the campaign is used in the Chicago area, the "Ingredients for Life" slogan is not positioned with the store's logo like it is for Safeway's other divisions (i.e. at the end of commercials and on billboards only Dominick's logo is flashed, not a logo combined with the slogan, as used in Safeway's other divisions). Under this campaign many stores will be drastically remodeled to the new format. Lifestyle stores feature more upscale trends than Dominick's last re-branding, "Fresh Stores." Usually Lifestyle stores feature an olive bar, carving station, Starbucks, and a sushi bar. Architectural changes include hardwood flooring and new direct lighting schemes that tend to be less abrasive. While Safeway's logo was redesigned under the campaign, present Lifestyle stores feature the traditional Dominick's logo. The first Dominick's to be branded a Lifestyle store was in Northfield.[3]


Banking

Realizing the ease of in-store banking, Dominick's formed an agreement with First Chicago NBD Corp., the first bank opened in 1995. Today many Dominick's feature in-store bank locations and ATMs by First Chicago successor, Chase.[1]


External links

Dominick's