Advertisement:

Dominick's leaving Chicago

In 1925 Dominick DiMatteo, a Sicilian immigrant, opened an Italian grocery store. By 1934 he expanded to a second store. In 1950 Dominick's opened its first supermarket.

FOR DOMINICK'S, SALE A NEW START                   $1.85 BILLION SAFEWAY DEAL MAY FUEL GROWTH

Photo: Chicago Tribune

During the 1950s-70s Chicago had many great supermarket chains. Kroger, National Tea, A&P, Jewel, and Dominick's. There were also large coops, like Certified.

The competition was fierce in a business with profit margins between 2% and 5%. Small businesses, including butcher shops, bakeries, and produce markets could not compete and folded. The fresh food industry changed drastically from locally sourced products to mass production and international distribution.

One stop shopping became the norm. People were loyal to their supermarkets. Over time the fierce competition left Chicago with only two major supermarkets, Dominick's and Jewel. Certified operated smaller stores through out the region.

Business writers claim Dominick's lost market share due to its purchase by Safeway and their California inspired ideas. Ideas that did not mesh with Chicagoans.

Others claim their prices were too high, Wal-Mart, Costco and Mariano's are blamed, as well as the rise of large produce inspired supermarkets like Tony's and Pete's.

What made Dominick's legendary is the American dream. A Sicilian immigrant opens a small store, works hard, expands, and eventually creates a major business servicing a metropolitan area of six million people. The chain is then sold to a large national corporation.

It is a one in a million story. Many immigrants came to America during the early part of the last century. They started small businesses. Most successful ones did not outlast the original proprietors. Many did not want their children to work as hard as they had or the economics and market changed.

Chicago, in many respects, is returning to its roots, a city of neighborhoods. Small and medium sized businesses are catering to the neighborhoods again. Butcher shops, delis, produce markets, bakeries, and even small clothing stores are making a comeback. Competition is still fierce. Shopping habits are hard to break.

But some small and medium sized business entities are taking advantage of people wanting more choices, especially in quality and price. They are also offering merchandise that appeals to the diverse ethnicity of Chicago. Some of the stores have grocery and produce sections tailored to specific ethnic groups.

CT biz-1011-dominicks-leaving MJW

Photo: Chicago Tribune

People no longer want to deal with the inconvenience of travelling far or driving around looking for a parking space.

For day to day purchases people want the convenience of the corner store along with myriad choices. It is one of the reasons Walgreen's and CVS are so successful and going head to head to put each other out of business.

Marshall Field was an innovator in serving customers. It is claimed he invented the retail personal service concept in Chicago. "Give the lady what she wants" was the linchpin of his success.

As outside corporations bought local successful businesses the whole notion of personal service was lost. Satisfying bean counters was more important than satisfying the customers.

Consistency is one of the keys to success. Dominick's kept experimenting with change. Just when people got used to a new concept they changed to something else. Whether it was a product or design change, they were not consistent.

The best employees in the world cannot satisfy customers if the products, prices, or stores are below par.

In 2014 thousands of Dominick's employees will be looking for work. It is hoped they can be absorbed into other grocery stores in Chicagoland.

As to sympathy for Dominick's as an institution, there should be none. They forgot "Give the lady what she wants" was and is the Chicago retailers' mantra. People want choices, quality, price, and service. They want consistency, certainty, and comfort. The more complex our lives get the more we seek simplicity and certainty.

There is a reason Potash Markets, the Big Apple, Gene's Deli, and Paulina Market, along with Pete's, Tony's, and Harvest Time are successful and thriving. They give people what they want. They are consistent. They know their customer base and cater to it.

It appears Mariano's, which will probably replace Dominick's as Jewel's major competitor, is giving "the lady what she wants". They are catering to neighborhood consumers.

Safeway, Dominick's owner, gave up on the customer long ago. Now prices must be paid. Consumers must find new places to shop, employees will be out of work, and more large retail buildings and properties will be vacant.

All because some guys in California never bothered to learn about and cater to Chicago.

 

 

 

 

 

 

 

Filed under: Uncategorized

Leave a comment