Dominick's parent company shedding Chicago-area stores
The parent company of the Dominick’s grocery chain said it plans to sell off its 72 stores in the Chicago area by early next year, according to a news release.
Safeway Inc. said the Dominick’s chain lost $35.2 million during the first nine months of the year. During the third quarter alone, the Dominick’s chain lost $13.7 million.
The fate of the stores remains uncertain.
Robert Edwards, president and CEO of Safeway, said the chain has received interest in the Dominick’s stores from “a number of different parties” and is looking to sell all or as many of the stores as they can as quickly as possible.
In McHenry County, Dominick’s has locations in Crystal Lake, Lake in the Hills and Fox River Grove. The three stores have about 110 employees, according to the 2012 McHenry County Book of Lists.
If Dominick’s were to leave Fox River Grove, “there would definitely be an impact,” Fox River Grove Village Administrator Karl Warwick said.
Warwick added the village would lose a source of sales tax revenue and an anchor tenant at the corner of Route 14 and Route 22 in the Stonehill Shopping Center.
Leaving the Chicago market allows Safeway to receive a cash-tax benefit of $400 million to $450 million, which could be used “to partly offset the cash tax expense on the sale of the net assets of Canada Safeway Limited,” according to the news release.
Safeway said it expects to use the tax benefits and cash proceeds from the “disposal of Dominick’s properties to buy back stock and invest in growth opportunities.”
The grocery chains also estimates it will have to pay out $375 million in pension liabilities over the course of 20 years.
“The decision ... to exit the Chicago market is consistent with Safeway’s priority of maximizing shareholder value,” Edwards said in the release. “These actions will allow us to focus on improving and strengthening our core grocery business. We are continuing to review all of our businesses to optimize our allocation of resources, improve sales and grow operating profits.”
• The Associated Press contributed to this report.