Dominick’s Gets Safewayed
ChicagoBusiness.com reports that Safeway Inc. is cutting dozens of jobs at Dominick’s Finer Foods’ headquarters, which it acquired nearly four years ago. It aims to consolidate buying, marketing and other functions at its own headquarters in California and other locations.
According to grocery industry experts, the money-saving move could make it harder for Dominick’s to stay in tune with local tastes and could cause some smaller regional brands to disappear from store shelves.
Safeway seems to be bucking conventional wisdom in the face of growing supermarket competition from big operators like Wal-Mart Stores Inc. and Target Corp. Many other grocers in the same situation have opted to differentiate themselves by stocking more perishables, prepared foods and specialty items from local suppliers.
Moderator Comment: Is Safeway making the right move by centralizing purchasing
decision making in California?
Safeway will continue to drive costs out of the system while it simultaneously loses market share. Those savings had better be big.