Dominick’s is out, but who’s in?

Naperville resident Vicki Osredkar says she's not surprised the Dominck's store on North Aurora Road is closing. | David Sharos ~ For Sun-Times Media
Dominicks closes its doors for the last time at Dominicks, Saturday, December 28th, 2013, in Chicago| Gary Middendorf/for Sun-Times Media

The future of Naperville’s three shuttered Dominick’s supermarkets remains uncertain — at least, to local officials and the community.

“We have not announced plans for the Naperville stores,” Teena Massingill, corporate public affairs director for California-based Safeway Inc., said this week.

The corporation, Dominick’s parent company, announced three months ago that it planned to exit Naperville and the rest of the 72-store Chicago market, employer to some 6,600 workers, by the end of the year. Safeway purchased the chain in 1998 for $1.2 billion.

The three defunct Naperville stores — at 95th Street and Route 59, Naper Boulevard and 75th Street, and the intersection of Ogden Avenue, Raymond Drive and North Aurora Road — could be filled by other grocery entities, but that’s not a certainty.

“I think everything is still on the table,” said Christine Jeffries, president of the Naperville Development Partnership.

From the city’s perspective, the new retailers don’t necessarily need to be the sort that sell food.

“We clearly want to have those locations filled with something, and we believe our economy is really doing well, and did well in 2013,” said city spokeswoman Linda LaCloche. “We feel confident that there is somebody that’s going to want to go in there.”

But the talks that will make that happen take place behind closed doors.

“The way the Dominick’s real estate office is sort of handling it is, as soon as a deal is completed, they announce it, but they don’t give out any details during negotiations,” Jeffries said, adding that the individual property managers aren’t privy to the substance of the discussions either. “There’s still a flurry of activity, and undoubtedly there will be some more announcements coming out, hopefully before the end of January.”

Safeway so far has sold more than a dozen of the Dominick’s stores, most of those to Roundy’s Supermarkets. The company operates some 166 supermarkets in the Midwest out of its Milwaukee headquarters. Its Chicago-area locations, doing business as Mariano’s, include one that opened in late October in Wheaton. Plans already have been announced to convert former Dominick’s stores in towns adjacent to Naperville, those at Eola Road and East New York Street in Aurora and at Black Road and Route 59 in Plainfield, into Mariano’s markets.

Rumors had circulated for a decade that Safeway wanted to sell the Dominick’s chain, but the tipping point came after the corporation announced plans last June to sell its Canadian stores. Safeway’s strategy is to use a cash tax benefit of $400 million to $450 million from the Dominick’s market exit to partly offset the tax obligation it incurred in selling the Canadian stores.

But the writing appeared on the wall years ago.

Safeway closed 26 Chicago-area Dominick’s from 2004-07, unloading those with slow sales. In 2006, the company launched a major renovation campaign to turn the remaining sites into “lifestyle” stores, designed on a model similar to Whole Foods.

The initiative came near the end of a turbulent period. Late in 2005, Dominick’s workers approved new contracts that ended a long labor battle. Workers had threatened to strike during the negotiations, prompting Safeway to try to sell the chain before reversing course.

But more trouble lay ahead. Fierce new competition depleted Dominick’s market share to 8 percent, little more than half what it was in 2007 and less than one-third the chain’s share in 2002, according to supermarket trade publications. Through the first nine months of 2013, Dominick’s losses before income taxes came to $35.2 million.

The chain’s onetime competitors are numerous, and expanding in Naperville. Consumers here have grocery options that include, among others, Casey’s Foods, Jewel, Whole Foods, Garden Fresh Market, Trader Joe’s, Aldi, Caputo’s, membership-based chains Sam’s Club and Costco, and WalMart, preparing to move this spring from its Route 59 location to a 180,000-square-foot, 24-hour supercenter adjacent to the Springbrook Prairie Forest Preserve. Standard Market, a European-style retailer, is set to open this spring in Naperville as well, occupying the former Franks Nursery & Crafts site southeast of Aurora and Ogden Avenues.

Jeffries won’t be surprised if the new occupant of WalMart’s soon-to-close location is a store of an entirely different stripe.

“I think the city would be fine if there was a different sort of retailer to go in there,” she said. “We still have tremendous opportunities ... It’ll be interesting to see how it all shakes out. There are some pretty interesting properties out there that Dominick’s is in control of.”

In the meantime, the company isn’t expected to talk much about it. Jeffries said it’s not an unusual way to manage communications.

“You never really want to negotiate on the street,” she said. “There’s a lot of moving parts.”

Sun-Times Media staff writers Sandra Guy and Leeann Shelton contributed.

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