It may not be the price, but it will happen. It’s likely it won’t be much more than that. It’s also likely that at some point Mr. Burd may be traded for a number one draft pick and a severance package that could last most of us a lifetime.

Never happen at $325 million. That’s just an opening gambit. We’ve all bought houses that way. I’m sure Safeway will sell at some point, and wouldn’t be surprised if it were sold in a couple pieces to max out the cash from competing interests and put a bit of a smokescreen up to ease the pain and embarrassment.

Truly embarrassing for Safeway. In the “times sales” business-purchase model, the multiple for supermarket chains is traditionally 1, creating a selling price of 1X annual sales. For Dominick’s, there are reasons that the multiple is less than 1.

Safeway allowed the stores to deteriorate, along with the deterioration of their union relationships. Both of these factors can be financially quantified and subtracted from the selling price, since the purchaser will have to invest these amounts to make the stores perform well. With preventative maintenance, it costs less to keep a car running properly than to pay for substantial repairs later on. Safeway neglected to change the oil at Dominick’s, and now must factor the cost of an engine overhaul into their selling price to a new owner.

It’s a real shame that Steve Burd’s ego and worry about his legacy are more important than the health of Dominick’s. I am sure that he would be more worried about Mariano making a success of it than he is the actual selling price. The only thing that would be harder on his ego than what has already happened is to see someone else make a success look easy.

Counting the winners in the Safeway/Dominick’s debacle is much easier than the losers. The only winners that I can think of are all Dominick’s competitors, especially Jewel. The losers are all the employees and their customers, both present and former.

Warren is probably right in that Steve Burd will probably sell Dominick’s in pieces which will prevent some one from making an easily identifiable success of the whole chain. It would be so much better if Safeway were sold or better yet if they had new senior management.

Warren has a point. Preventing embarrassment is probably one reason Dominick’s has not been sold yet. We all know Bob Mariano probably loves Dominick’s more than life itself. He would put his heart and soul into fixing Dominick’s. That would be a huge slap in the face for Steve Burd who has embarrassed himself already by systematically ruining every acquisition he has made. I think Mr. Burd would prefer to sell Dominick’s to someone he knows would fail in order to help his ego. I was told by some former employees and geography vendors that Roundy’s had the addresses of both companies geo-coded to help determine the best place to put a new combined corporate headquarters in Gurnee, Illinois in early 2003. However, that never came to pass, Roundy’s bought another good bargain – Rainbow – and relocated their headquarters to Milwaukee. Roundy’s is already known as “Dominick’s North” due to all the group vice presidents and managers who have a Dominick’s pedigree in there resumes. Mr. Mariano has filled most of the important positions… Read more »

The Dominick’s Paradox: Safeway’s Steve Burd is between the rock and the hard place. With labor contracts pending, he can’t repent too soon, yet he doesn’t know how soon it may be too late. And a $1+ billion loss would produce bitter fruit out in LaLaLand. Over in Wisconsin and flushed with cash, Bob Mariano should not covet Chicagoland just because it may be within his reach again nor should he seek revenge, which can often be like biting a dog because the dog bit you. So the questions seem to be: “Is Dominick’s today worth much more than $325 or so million?” and “Can Dominick’s quickly regain what it used to do so very well?” The road to re-establishing a reputation and a customer following is difficult. Many things change “back home” while they are changing everywhere else. And the changes that have taken place in Chicago during the past 7 years have weakened the sinew of Dominick’s retail muscles. Thomas Wolfe has cautioned us that, “You can’t go home again.” He may be… Read more »

Safeway still has one card to play in its Dominick’s hand – the “Lifestyles” store concept – basically, a new rendition of the old “Fresh” store. The numbers from the opening of this concept store in Northfield this week will tell the tale. If the numbers are there, they will expand the rollout and try to breathe life back into Dominick’s. If the numbers aren’t there, look for a sale. I think that taking the same product and putting it into a new wrapper won’t help as much as they need.

What happened to Dominick’s and its Fresh Store format, that represented – before Safeway – an example of the future supermarket approach to the perishable business, AND addressing the consumers’ needs for meals, catering and other superior perishables, just might be rekindled.

Mariano built a strong team to create the Fresh Store format and, importantly, knows the Chicago market.

How long can Dominick’s status last? Maybe not much longer.

Now that the new Roundy’s corporate headquarters is in Milwaukee instead of Gurnee, Illinois, it’s even more obvious why Bob Mariano is pushing to get Metra trains to extend up to Milwaukee from Chicago.

Original URL: http://www.jsonline.com/news/metro/feb05/305009.asp

Robert Marino has taken Roundy’s into unimaginable territory and is to be commended for the extreme growth of the company. However, the ship may be getting too big to steer. Net sales are down for the quarter while net income is up. This can mean one of two things: effective streamlining of operational costs and/or net profit is now taking primary focus. It is a well known fact the acquisition of Roundy’s by Willis and Stein was to grow the company and eventually sell to a major player. While sales are down with many grocers, it is disconcerting that Roundy’s was well above the norm in net profit and still continues to trim out management and key personnel. Dominic’s would be a great acquisition, but I would expect following the transaction would be an even greater announcement of Roundy’s sale to a major player such as Kroger, which also needs new territory and sales to overcome its decline in net sales and income. Roundy’s has a tremendous market share in the Milwaukee area but has… Read more »