Ingredients For Life. In , di Matteo opened a second store and put it in the hands of his year-old son, Dominick Jr.
Some 16 years later, the di Matteo family opened its first supermarket — a 14,square-foot warehouse that inaugurated the rise of a major Chicago-area chain of large format stores. The company continued to expand and eventually operated stores in , the year in which Safeway Inc. It explored the option of leaving sales areas with exposed ceilings, piping and ducts; opened photo departments and started selling foods in bulk.
The upgraded stores were a success, ringing in higher profits than conventional supermarkets. Safeway discontinued the Fresh Stores style and began implementing its own store layout and house brands.
Safeway purchased the company five years after Dominick di Matteo died of lung cancer — two years after his children sold the company to Los Angeles-based grocery investment firm Yucaipa Co. Unhappy with the turn of events, Safeway attempted to sell the company in , but later decided to retain the chain, closing some 20 stores and converting another 20 to the Lifestyle format.
They would undergo architectural upgrades, including hardwood flooring and direct-lighting schemes. On the other end of the grocery business, Dominick's took steps to counter the rise of warehouse stores, in introducing Omni Superstores, massive stores more than 85, square feet that sold both food and non-food items 24 hours a day. In , Dominick di Matteo died, leading to speculation that his heirs would soon sell the business. Although James di Matteo vowed to keep running the family-owned operation, the local press reported that he and his four sisters did not appear to share their father's passion for the supermarket business.
Although there was no shortage of suitors, more than a year passed before the family did indeed decide to sell the business. In the end, the Di Matteo family sold the chain to an investment partnership headed by Yucaipa Co. For Yucaipa and its head, Ronald W. Burkle, it was a crafty deal. The Di Matteo family as well as senior management also retained a small stake in the business. Burkle had roots in the grocery industry; his father managed a Claremont, California, supermarket, part of the Stater Bros.
From the age of five, Burkle spent time with his father at the store, sweeping up and stacking shelves. As an adult, Burkle maintained a dual interest in investing and the grocery industry. Although he intended to study dentistry at the California State Polytechnic College, he dropped out in and went to work full-time for the Stater chain. In , Stater's corporate parent, the energy firm of Petrolane, decided to sell the chain. Burkle and his father, who was now Stater's president, assembled a buyout group which through a series of fortuitous circumstances grew to include Warren Buffet's partner, Charles Munger.
Although the Burkles' bid had the support of Petrolane's president, the father and son team failed to vet their interest with the chairman of the board.
When they made their pitch to the board of directors, they were promptly sacked. Ron Burkle busied himself with his investments until , when he decided to form a holding company with two former Stater colleagues to invest in supermarkets.
He named the new company Yucaipa after the town he lived in west of Los Angeles. The firm's first deal came in when it acquired the Kansas-based Falley's chain. A series of other acquisitions followed, all with a similar pattern: the deals were highly leveraged, with Yucaipa contributing a modest amount of the funds and taking back a portion in cash fees.
It was often a high-wire act but one that Ron Burkle performed skillfully. Yucapia planned to continue Dominick's expansion program, which included rolling out more stores adopting the chain's new European-style, open market "Fresh Store" concept that featured in-store dining, restaurant quality take-out food, upscale meat and produce departments, specialty bakeries, and floral shops.
Not only did consumers like the Fresh Stores, these units produced higher grosses and stronger profit margins than conventional supermarkets. In fiscal , Dominick's opened eight Fresh Store outlets, followed by another 15 the following year.
The Omni warehouse format, on the other hand, had fallen out of favor with consumers, and management opted not to open any news units. Another improvement to the bottom line was expected to come from the introduction of upscale products carrying a new private label called Private Selection, replacing the tired Heritage House brand Dominick's had been carrying.
Another initiative the chain was pursuing during this period was the introduction of in-store banking branches, in partnership with First Chicago NBD Corp.
To help fund the chain's growth, Yucapia also looked to cut operating costs, realizing some savings through administrative efficiencies and even more by closing down less profitable stores. Although it opened more Fresh Store units, Dominick's remained essentially the same size and even lost some market share.
While Dominick's was losing marketshare in Chicago, Jewel edged over 31 percent and other competitors entered the fight. To gain some much needed cash, Yucapia took Dominick's Finer Foods public through a parent entity known as Dominick's Supermarkets. Most of the money was used to pay down bank debt. Following its initial public offering, Dominick's launched another expansion and remodeling effort, and once again made gains in marketshare.
In , the chain acquired two area Byerly's Inc. The new acquisitions from Kroger increased the number of stores to The Northlake distribution center which was original built by Kroger in was used by Dominick's until the chain was closed in The DiMatteos continued to expand and had acquired 4 stores from Kohl's[11] and 16 stores from Eagle in and respectively.
In , Dominick's experiment with a discount grocery store concept called Jerry's Deep Discount Centers with just 3 units, but the experiment was terminated after a few months of operation.
In the s and early s, under the direction of Mr. Bob Mariano, Dominick's experimented with new large "food and drug" combo stores. Dominick's was one of the first to experiment with exposed-ceiling sales areas, exposed structural elements such as piping and HVAC ducts, large-scale state-of-the-art telephone systems and POS systems, video departments, one-hour photo, bulk foods and many other "new" s concepts.
This design carried over to the Omni Superstore Division of Dominick's. Early Dominick's food and drug combo stores contained a full glass front wall that overlooked the parking lot with a customer service desk in the middle of the glass wall. Between , Dominick's stores contained a 2 story area similar to its sister format Omni Superstore at the front of the store.
The 2nd level contained a break room, employee restrooms, office area and windows that overlooked the sales floor. After and the introduction of the Dominick's Fresh Stores, the design was switched back to a single level store throughout.
In the s, Dominick's took the "food and drug" combo to the next level with the introduction of the Dominick's Fresh Store in During the late s, the Fresh Stores were the main expansion model for Dominick's and was rolled out to all new stores including former Omni Superstores, up until the purchase by Safeway.
Safeway bought Dominick's in and put an abrupt halt to the Fresh Stores, instead rolling out their own prototype with the Fresh Store logo on the outside of the store. Safeway implemented its own store layouts as stores were remodeled, and their own house brands such as Safeway Select. In , the Safeway Lifestyle Store concept was brought to the Dominick's brand and in turn, many stores were remodeled with many of the same elements that Mr.
Bob Mariano the CEO of Dominick's during the Safeway takeover had instituted prior to Safeway's acquisition but were in turn removed in by Safeway. Items such as hot prepared foods, salad bars, localized merchandise, and enhanced customer service, once removed by Safeway, were put back into service to try and win back the Chicago consumer. Mariano currently the CEO of Roundy's Mariano's as of , expanded under the Mariano's banner and put pressure onto the Dominick's stores, which eventually closed in late Dominick's and its sister operation, Omni Superstore, was a pioneer in experimenting with unique ways for in store communication method between employees and methods for announcing messages to customers.
Most retail stores in the early to mid s still employed the use of analog 1A2 telephone systems with separate analog paging handsets or even microphones. Stores could be dialed using short codes and without long distance charges. An employee at the service desk would announce "Produce, you have a call on " and then the employee in produce would simply go to any phone in the entire store and dial to retrieve a call.
Around , this was highly advanced as most grocery stores still relied on analog 1A2 phone systems with a separate intercom handset that only had one or two voice paths. In addition to the overhead paging and parking capabilities of the phone system, employees could directly dial to each telephone in the store via an intercom extension such as or , etc.
For example, general merchandise would be extension The store manager could dial to directly dial general merchandise without having to overhead page across the entire store. While paging was frequent, Dominick's operations also experimented with walkie talkie radios. The radios weren't meant to replace the overhead paging, but to cut down on a few announcements, but overall, overhead paging was the most common way for Dominick's employees to communicate.
While the typical lay in ceilings stores used standard ceiling mounted loud speakers, the exposed structure stores used unique high powered Atlas Soundolier paging horns directed downward from the roof trusses in the s stores. Most of the s stores used white Soundsphere spherical speakers attached to the bottom of the roof deck. There was some experimentation with column mounted boxed speakers at customer level as well. With the Option 11 systems, an even higher advanced feature package was outfitted into the Dominick's and Omni Superstore stores.
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