By George Anderson
At $325 million, Dominick's Finer Foods would be a bargain if Roundy's can get Safeway to part with it. The grocery wholesaler/retailer, which recently picked up $225 million in cash after selling two distribution centers to Nash Finch, is led by former Dominick's boss Robert Mariano.
Steve Burd and company paid $1.8 billion for the Chicagoland chain seven years ago and have spent recent years trying to fix missteps of Safeway management's making, reach a peace with its unions and sell the business.
An unidentified source described by The Chicago Tribune as being close to Roundy's told the paper, "Yes, we would be interested in buying Dominick's. We think it's a good fit for us, but Safeway isn't quite ready to sell it until it at least has a deal with the union over a new labor agreement."
Roundy's and others were rumored in the past to be on the verge of acquiring Dominick's. Deals were scuttled, however, because Safeway and the unions representing workers at Dominick's, primarily the United Food and Commercial Workers (UFCW), were unable to hammer out a contract.
Safeway spokesperson Brian Dowling has declined to comment on sale rumors but did offer an update on the Dominick's labor situation. "We have made some good progress with the Teamsters union, but it's taking longer than we expected with the UFCW."
Moderator's Comment: What is your reaction to the possible sale of Dominick's to Roundy's?
We'd hate to be in Steve Burd's position in this mess.
The Dominick's purchase has been an unmitigated disaster and while it will require some pride swallowing to sell the business for $325 million after buying it for $1.8 billion, it has to be done. Safeway cannot fix Dominick's.
Unfortunately for Mr. Burd's reputation as a manager, Robert Mariano may be the one person with the right team to fix Dominick's. The only thing worse than selling the chain at a huge discount to what you paid for it was watching the next guy come in and make it a success. - George Anderson - Moderator