Dominick’s was born in 1918, shortly before the grocery business began transitioning into a self-service industry that would later be known as the supermarket concept. Dominick di Matteo, a native of Sicily, opened a small deli upon immigrating to Chicago’s west side that year. In 1934, di Matteo opened a second store and put it in the hands of his 16-year-old son, Dominick Jr. Some 16 years later, the di Matteo family opened its first supermarket — a 14,000-square-foot warehouse that inaugurated the rise of a major Chicago-area chain of large format stores. Dominick’s was among the first new supermarkets in that era to introduce in-store delis and frozen-foods sections.
By 1968, Dominick’s grew to a 19-store chain. The di Matteos sold the company to Fisher Foods, but continued operating it with Fisher Foods’ financial backing. Unhappy with the agreement, the family bought back the chain in the 1980s for $100 million. The company continued to expand and eventually operated 116 stores in 1998, the year in which Safeway Inc. took over the company.
Throughout the 1980s and 90s, Dominick’s experimented with new store layout and the food-and-drug combination concept. It explored the option of leaving sales areas with exposed ceilings, piping and ducts; opened photo departments and started selling foods in bulk. In 1996, the company introduced Fresh Store, a concept thought up by then-CEO Bob Mariano: Dominick’s would offer prepared carry-out foods, specialty bakeries, in-store restaurants and cafes, including Starbucks, floral shops and upscale subtle graphics.
The upgraded stores were a success, ringing in higher profits than conventional supermarkets. Fresh Stores were the primary model for the company’s expansion, which included a takeover of Omni Superstores, until the Safeway buyout. Safeway discontinued the Fresh Stores style and began implementing its own store layout and house brands. When customers withdrew patronage of Dominick’s in reaction to the changes, Safeway introduced a new format similar to the Fresh Stores style: the Lifestyle format.
Safeway purchased the company five years after Dominick di Matteo died of lung cancer — two years after his children sold the company to Los Angeles-based grocery investment firm Yucaipa Co. As part of its takeover, Safeway tried to phase out Dominick’s style, which catered to Chicago’s multiethnic food-loving base, and put in its place the model under which Safeway successfully operated in California. But that west-coast style clashed with Dominick’s patrons and the company’s market share in the Chicago region dropped by about 10 percent from 24 percent to 14 percent between 2002 and 2007.
Unhappy with the turn of events, Safeway attempted to sell the company in 2003, but later decided to retain the chain, closing some 20 stores and converting another 20 to the Lifestyle format. In 2005, Safeway began a $100 million brand re-positioning campaign called “Ingredients for life,” the slogan used for all of Safeway’s divisions. Under the new campaign, Dominick’s stores would feature a Starbacks, salad and olive bars, and a carving station. They would undergo architectural upgrades, including hardwood flooring and direct-lighting schemes. Dominick’s stores also include in-store banks and ATMs operated by Chase Bank, the successor of First Chicago NBD Corp., the bank with which Dominick’s had formed an agreement in 1995.
Today, Safeway operates 99 Dominick’s locations throughout the Chicago region, which includes the metropolitan area associated with the city, its suburbs and parts of northwest Indiana and Wisconsin.
Headquarters: Oak Brook, Illinois
No. of Stores: 99
No of Employees: 12,000
Geography: Chicago and suburbs, northwest Indiana, parts of Wisconsin
Special Services: Bakery, floral, liquor, pharmacy, dry cleaning, DVDplay kiosk, fuel, photo, Starbucks
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