The stores will be converted to the Mariano’s banner in early 2014, according to the release.
The exit of Dominick’s is the biggest story in the Chicago retail scene, said Bill Bishop, chief architect of Barrington, Ill.-based Brick Meets Click and Willard Bishop Consulting.
“That is going to take a major chain player out of the market, which is going to have some effect,” he said.
Shift from union shops
While Jewel and Mariano’s have snapped up some stores, retail observers say there are several candidates to buy the Dominick’s stores.
Jewel and Dominick’s are union shop retailers, but Dick Spezzano, owner of Spezzano Consulting Service, Monrovia, Calif., said independent retailers are on the rise.
“Everything coming into that town is nonunion,” he said.
Wage rates of $14 per hour and less give independents the advantage compared to union rates.
“The conventional chains are weaker there than they have been in some time, with the announcement by Safeway that Dominick’s is for sale by piecemeal method,” Spezzano said.
Spezzano speculated that Food for Less, a division of Kroger, may pick up some stores. Jewel could buy more stores as well, he said.
Independent retailers may pick up several Dominick’s stores, Spezzano said.
As those Dominick’s stores change hands, Bishop said the net effect will be increased competition in the Chicago market.
Some of the stores won’t reopen as supermarkets, but will be converted to another type of retail shop. If half of the stores are sold to other supermarkets, Bishop predicted each store under new management may see an increase in business of up to 50%.