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There were two interesting stories yesterday about the possibility that Kroger might acquire some of the Dominick's stores in Chicago that Safeway has put on the market with the goal of unloading them by early next year.

The Cincinnati Business Courier writes that "Kroger is the leading candidate to buy most or all of the 68 Dominick’s stores that are now up for sale there, according to two analysts based in Chicagoland. That move, if it took place, would get Kroger into a huge market where it doesn’t have stores now."

Analysts tell the Courier that Kroger has the economic and management wherewithal to make such an acquisition work, though the feeling seems to be that buying Dominick's would be a very different proposition that buying Harris Teeter; with the latter, Kroger is getting a strong, well-managed company, while there is a lot more that needs fixing at Dominick's.

However, the San Francisco Business Times - a sister publication to the Courier - suggests that it is dubious that Kroger would want to buy all of some of Dominick's, since it would mean "navigating the Windy City's high labor costs and intense competition that sent Safeway packing."

The story puts it this way: "Kroger is on a roll, so why take on Safeway's headaches?"
KC's View:
Good question.

I am not persuaded that Kroger is going to make a big Chicago investment. But I do think that if it does, it will do what is necessary to revive and reinvigorate the stores that Safeway is so anxious to unload.