Safeway bought Dominick's ten years ago, and its market share went down almost 50% in the first five years. Jewel outmarketed them, and Wal-Mart and Home Foods didn't help either. But as the Tribune reports today, the retooling of Dominick's into a "lifestyle" grocery continues. Some say it is a success, and others not. Personally, I like the new stores, but of course I am not going to drive 45 minutes to get to one.
If I were Safeway, I'd be more worried about the other grocery chain coming to town: Milwaukee-based Roundy's. Their CEO used to run Dominick's, and if I had a nickel I'll bet he will try to out-do Dominick's and probably succeed. Roundy's tried to buy Dominick's in 2003, and rumors were afoot last year that tgere was another unsuccessful run at the chain. Safeway has the cash, for sure, but good people also make a good grocery store. (For instance, I also happen to really like the employees at Kroger, and that is a factor in shopping for me.) Can they beat Roundy's in that regard? I'll wait until they open in Chicago before deciding.