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Dow Jones reports that Safeway Inc. has told the US Securities and Exchange Commission (SEC) that it will “dispose” of Dominick’s Supermarkets’ assets “absent a restructuring of the labor contracts to achieve parity with Jewel Food Stores.” Jewel is owned by Albertsons, and is Dominick’s chief rival in the Chicago market.

The company said that it would not attempt to operate the stores if the United Food and Commercial Workers (UFCW) union goes on strike after the labor contract expires on November 9.

According to the story, Dominick’s management told the union that its revenue has declined since 1999, and that same store sales figures have been negative for the past three years.

While the chain blames the union for its troubles, the union blames Safeway’s management for mistakes it has made since acquiring Dominick’s, including replacing popular local items with its Safeway Select private label.
KC's View:
Hardball. Nothing but hardball.

Of course, there would be some (and not just union members) who would say that Dominick’s decline has nothing to do with the union, but rather has to do with Safeway’s miscalculations about how to appeal to the Chicago market. There would be some who would say that Safeway made the same mistakes with Dominick’s that it made with Genuardi’s in Philadelphia.