The Dynamic Dominick's

Last Thursday, a couple of longtime PFS friends clued me in on some important breaking retail news from Chicago, before I noticed it in the business headlines myself. Dominick’s Finer Foods, the number two traditional supermarket chain in Chicago, is being put up for sale by its owner of the last fifteen years, Safeway. 

That night, I put up a few comments on Facebook about it, ending with “This will be interesting to watch.” By the next morning, however, having read some more articles about it, I realized what was really going on - and my heart sank. The “interesting to watch” comment seemed regrettable, almost flip now, as it became clear that the possibility of the Dominick’s name going away for good is very real. 

In a way, I find this almost as hard to swallow as the demise of the great Marshall Field & Company name. I’m certainly not intending to compare the stature of the two (a fairly ridiculous idea), but am strictly speaking from personal feelings. Growing up, I set foot in a Field’s store maybe two or three times a year, whereas we shopped at Dominick’s all the time. Every week. For years. 

Dominick’s, founded in 1918 by Dominick DiMatteo with a single, small market at 3832 W. Ohio Street, grew very slowly in the first 40 or so years of its existence. Things started to accelerate in 1950 with the opening of a full size (for the time, that is – 14,000 square feet) supermarket on North Avenue. By 1963, there were still less than 10 stores, but by decade’s end they were rapidly growing through acquisition, picking up three stores from E.J. Korvette in 1965 and 18 more from Kroger when they excused themselves from the Chicago area in 1970. 

One of the greatest things about Chicago is its tremendous ethnic diversity, which of course extends to food. Dominick’s stock-in-trade was its vast offering of ethnic foods – certainly Italian cuisine (owing to the founder’s Sicilian heritage) from the start, and a particular emphasis on Jewish foods, but it soon encompassed culinary offerings from all over Europe, Asia, and Latin America – a true point of differentiation, in the early years, from its competitors.

In 1968, Dominick’s became a division of Cleveland-based Fisher Foods, operators of the Fazio’s supermarkets. From that point forward, newly built Dominick’s units popped up seemingly everywhere across Chicagoland. The Fisher-Fazio “Heritage House” brand became a staple of area households, including ours. 

By the mid-1970’s, the Chicago grocery market centered around two key players - #1 Jewel and #2 Dominick’s. Once-upon-a-time market leaders National Tea Company and the fast-fading A&P were all but vanquished (both were gone from the area by 1978), and everyone else was pushed to the margins. 

In 1981, the DiMatteo family bought the company back from Fisher Foods, and would continue to operate it for the next decade and a half. The second DiMatteo era saw explosive growth for Dominick’s, gaining ground on Jewel nearly every year, ultimately surpassing them in terms of sales and profitability per store. 

But in 1993, Dominick DiMatteo Jr. passed away (Dominick Sr. had died in 1981), and it soon became clear that the family had interest in selling the business. In 1995, Dominick’s was acquired by The Yucaipa Group, the Los Angeles-based investment firm headed by Ron Burkle, who singlehandedly reshaped the West Coast grocery industry in the 1990’s, buying and later reselling such venerable banners as Ralphs and Alpha Beta, among others. (Ron’s still at it in a big way - purchasing a large stake in A&P from their bankruptcy in 2012, and buying the Fresh and Easy chain from the British retail firm Tesco just recently.)

In 1998, Burkle sold Dominick’s to Safeway, the Pleasanton, California-based supermarket titan. As is often the case, the match looked great on paper – for Dominick’s it meant joining a highly respected, deep-pocketed company, ready to add rocket fuel to their already impressive growth. For Safeway, it meant an instant leadership position in one of the country’s most important markets - and a new frontier. 

Almost from the start, though, it was a calamity. The shift of decision-making power from Chicago to the parent company led to a disastrous misread of Chicagoans’ innate buying characteristics – a strong preference for local brands, and a tendency to be underwhelmed by trends emerging from either coast. There was little affection for the Safeway house brands that now filled Dominick’s shelves, despite their storied histories and acceptance in Safeway’s core West and East Coast markets. 

By the time substantial steps were taken to remedy the problems, Dominick’s was in steep decline. Now, they were a very distant #2 in the market compared to Jewel (itself no stranger to struggles in recent years). On the top of that, the door was now open for smaller locally-owned chains to grow nice footholds in the market, including Caputo’s and Tony’s, for example, who have placed a strong emphasis on local and ethnic foods, swiping pages right and left from Dominick’s discarded playbook. Added to the mix are the more recent competitive forces affecting traditional grocers in many areas – Whole Foods from the prestige end of the market, and Walmart and Aldi from the price end.

Within a few years, rumors began to fly of a possible selloff of Dominick’s (including a potential re-sale to Burkle in 2003 among them), but until now Safeway held on, the store count dwindling from a peak of 130 units to the current 72. 

Now Dominick’s truly is up for sale, and in all likelihood it will be split up among several buyers. Jewel will be taking over four locations, two in Chicago, one each in Homer Glen and Glenview. Kroger is reportedly looking at several locations for their Food4Less banner – their successful, if low-key, reentry into the market. (Dominick’s alumnus-operated) Mariano’s Fresh Markets, a division of Wisconsin-based Roundy’s, is interested in some locations, according to news reports. Other units might sit vacant when all is said and done. 

With this in view, I thought it might be a good time to look back at the glory days of Dominick’s, via a photo-tour of what was arguably their most architecturally interesting store. Opened in 1964 in near-north suburban Evanston, at 3333 W. Central Avenue, the store had many striking features. Chief among them were a 26-foot high cylindrical tower (finished in red-orange tile on the exterior and walnut strip-paneling inside, housing an exquisite Customer Service area), and a Japanese-style rock garden. There was also an unusual walkway awning, and the whimsical feature of stylized “cutout” figures mounted to the brick wall, forming a “line” of sorts leading into the store. 

Designed by the Chicago architectural firm Teutsch-Lucas Associates, the store design was conceived in part to take best advantage of the odd dimensions and slope of the corner lot it was situated on, and to present an attractive image to a high traffic, a high income area. The rest of the interior was typical of Dominick’s very high design standards. Those familiar with the Dominick’s of old will notice the lack of “Heritage House” branded goods, as these photographs were taken a couple of years before the Fisher Foods buyout. You might also notice, however, the “Country’s Delight” dairy products, a product of Certified Grocers. Certified was also the licensee for “Raggedy Ann” brand canned goods, another popular brand at Dominick’s in the pre-Fisher Foods days. 

This store was featured by Progressive Grocer twice – in the May 1965 issue and again a few years later in their book “Progressive Grocer’s Outstanding New Super Markets”, from which these pictures came. I first saw a picture of this store on the “Bright Lights, Dim Beauty of Chicago” blog from Didi, another longtime friend of PFS. On a 2009 trip to Chicago, I was able to swing by the store, which has been a CVS for years now. The interior, as you might expect, has drastically changed, but some of the charming exterior features remain.

Reflecting one more time on Dominick’s plight - I guess the best thing at this point would be for a local, family-owned concern to pick up a few of the stores and continue to operate them under the Dominick’s name. With the right combination of passion and commitment to the local customer, you never know what great things might grow from that. It could happen. It’s been done before.

All Together Now at Fisher-Fazio's

The Fisher-Fazio family is gathered together for this “family photo” from 1975. Even Uncle Ralph from Chicago drove in, with his bag of groceries from Dominick’s. (Just seeing that 70’s Dominick’s bag makes my arms hurt, when I think back on how many hundreds of those things I lugged from the family gas guzzler’s trunk to our kitchen back then. Definitely more good memories than bad of those days, though…) Along the wall are displays of Heritage House canned goods, Fisher-Fazio’s house brand, that were big sellers in the Ohio and Chicago stores.

Things began to unravel at Fisher-Fazio in the late seventies, with most of their divisions not faring well in the “price wars” of that era. In 1976, the company lost its number one slot in their core Cleveland area to Pick-N-Pay. The California stores, which had never really taken off under Fisher-Fazio leadership, proved to be a drain on the company’s profits and as mentioned were sold off to Albertsons that year. Within a couple of years, they would trim the sails in markets closer to home, including Youngstown and Columbus among others.

In October 1980, the company found itself in serious legal (and public relations) trouble when it was charged in a price-fixing scheme along with competitors Stop-N-Shop and First National Stores, owner of Cleveland’s Pick-N-Pay chain. Executives from the three companies, including Fisher CEO John Fazio, were indicted. Fazio received probation in 1982, and his sentence was commuted two years later. The three companies were ultimately forced to make restitution to Northeast Ohio customers, sending out coupons for $20 worth of free groceries to some one million households.

The company lost one of its major (and only) bright spots in 1981. Unhappy with Fisher's direction, Dominick DiMatteo Jr. bought back Dominick’s, the company his father founded, for nearly $100 million. By that time Dominick’s had grown to 71 stores and second place (behind Jewel) in Chicago market share.

In 1983, Cincinnati-based American Financial Corp., headed by Carl H. Lindner, purchased an interest in Fisher Foods. Lindner is a well-known Cincinnati industrialist, whose interests have included Chiquita Brands International (yep, the banana company is actually based in Cincinnati), United Dairy Farmers (a chain of dairy/convenience stores) and for a time, a major interest in the Cincinnati Reds. In 1984, Lindner’s company would buy out the Fazio family’s holdings in Fisher Foods, ending an era.

The economic difficulties – loss of manufacturing jobs, population decline, etc., which plagued the Cleveland area made for a difficult operating environment, and in 1987 American Financial decided to sell their controlling share in Fisher Foods to a group of familiar names in the Cleveland grocery industry. A new entity, named for a Bedford Heights, Ohio address - “5300 Richmond Road Corporation”, was put together by American Seaway Foods, Rini’s Stop-N-Shop and Rego’s Stop-N-Shop. In a way, the forming of this consortium was reminiscent of the process that reconstituted Fisher Foods back in the sixties. The “5300” company would fold into Riser Foods, the name of which incorporated (sort of) the first initials of the Rini, Seaway and Rego names. In 1997, Riser was absorbed into Pittsburgh-based Giant Eagle.

Fazio's California Adventure

Under management by the Fazio/Costa group, Fisher Foods became widely recognized as one of America’s fastest-growing supermarket chains at the end of the 1960’s, going into the early 70’s. The company had begun a successful expansion program, adding other key Ohio markets to their original Cleveland base. The acquisition of the Dominick’s chain in Chicago was bearing fruit as well, and the purchase of Kroger’s remaining Chicago stores in 1970 would more than double their presence there.

To keep the momentum going, the Southern California market was chosen as Fisher’s next expansion frontier. On June 12, 1972, a purchase agreement was announced between Fisher Foods and the Dayton-based E.F. MacDonald Company, owner of the Shopping Bag supermarkets, a 46-store chain with regional headquarters in San Gabriel, California and stores throughout the SoCal market. MacDonald, known best as the owner of Plaid Stamps, was eager to sell the operation, which had been losing money.

Shopping Bag Food Stores began its existence with one small grocery store on L.A.’s Wilshire Boulevard in 1930. Three years later, Shopping Bag would open its first supermarket, and the company would grow with the area from there, going public in 1954. In 1960, Shopping Bag was merged into Vons Grocery Company, adding its 38 stores to Vons’ 28. The Shopping Bag units would continue to operate under their original name. In 1965, The Federal Trade Commission filed suit against Vons in the U.S. District Court in Los Angeles, alleging that the Vons/Shopping Bag merger served to lessen grocery competition in the area. Initially, Vons won the case, but the Justice Department appealed to the U.S. Supreme Court, who in a landmark ruling the following year ordered Vons to divest the Shopping Bag stores. The whole proceeding seems almost laughable today, considering the favorable eye the FTC has cast upon much larger mergers through the last 30 years or so, truly setting up a “mega-merger’’ climate.

In June 1967, Vons completed the sale of 40 stores (35 Shopping Bags and 5 Vons) to E.F. MacDonald. The MacDonald firm was founded by Elton “Mac” MacDonald, who in 1957 had sold out his 1/3 interest in Top Value Stamps, the brand used by Kroger and Boston’s Stop and Shop, among others. After initially turning away from the trading stamp biz when he ventured off on his own, MacDonald created Plaid Stamps and landed a huge customer for them at the dawn of the sixties– The Great Atlantic & Pacific Tea Company, who had previously resisted the trading stamp trend with vehemence. Eventually, competitive pressures and the pleas of A&P district managers led the company to adopt the stamps in a number of its regions.

A successful supplier to the industry, now MacDonald would try its own hand as a supermarket operator, in arguably the most dynamic market of all. They would modernize some stores, open new ones, and sell off a good number of the smaller units. MacDonald made a bold move in 1969 when they bought out A&P’s 31 supermarkets (adding to the 40 existing Shopping Bags at the time) in the Los Angeles, ending A&P’s presence there. A&P, having decided that they would need twice their present number of stores in Southern California to maintain a profitable operation there, opted instead to throw in the towel. The A&P stores were converted to Shopping Bags.

In 1972, having whittled down the Shopping Bag store count to 46 stores, MacDonald agreed to sell them to Fisher Foods. The stores would be rebranded “Fazio’s-Shopping Bag” and would shift to the ever-popular “every day low price” strategy, ditching trading stamps (Ironically, Shopping Bag gave out Blue Chip Stamps, the standard for most SoCal grocery chains, instead of MacDonald’s own Plaid stamps) along the way. The stores were remodeled, and deli and bakery departments were brought up to Fisher standards. Marshall Italiano was placed in charge, reporting to John Fazio in Cleveland. Ground was broken for a new office and distribution center in City of Industry, and the first all-new Fazio’s-Shopping Bag store was slated to open in the fall of 1974 in Fountain Valley.

The California (ad)venture didn’t last long, unfortunately. The troubled economy of the mid-70’s and Fisher’s growing internal and financial problems were largely to blame. Also, a couple of embarrassing incidents – charges of false advertising and mislabeling – made the news, affecting the company’s reputation. In 1978, the Fazio-Shopping Bag stores were sold to Albertsons.

The photos above are from 1973 and 1972 respectively, and show two Shopping Bag stores freshly rebranded to add the Fazio’s name. If you click on the enlargement of the second photo, you can see three original signs with the classic Shopping Bag logo, two backlit signs above the entrance doors and a neon sign (barely visible) on the right side, near the edge of the photo. Below is a full-page display ad from late 1972, trumpeting the ownership change and new pricing policy.

I’d love to know the location of those two stores. If anyone can advise on that, I’ll gladly give them a free one-year subscription to this site.

Oh wait, it’s already free…
In that case, a free “thank you” instead!

Thanks to Jeff for identifying the store in the second picture as the one located at 1000 E. Valley in Alhambra, and for bringing us up to date on that location: "It was remodeled in the late 70's and again in the 90's. Most of the glass in the front was taken off. This store was later converted into an Albertsons, then a Grocery Warehouse, then a Max Foods, now a Lucky store. That tower lasted until the 2nd remodel".

Jeff has come through for us once again, identifying the first store location as 1611 W Whittier in La Habra. He visited this location and found: What looks like a neighborhood in the back sorta matches.- The brick is still on 2 sides of the building- The Sign is still in the same spot on the store- The light to the left of the sign is present today.- The driveway is there but could have been refigured. The store over the years though has been remodeled at least two times.

Thanks, Jeff!

The fabulous fazio's

By the early 1960’s, Fisher Foods was in trouble. The company began losing ground in the late 1950’s, posting a net loss for 1959. The losses would grow, topping $300,000 in 1963. By 1964, with 90% of Fisher’s stores now losing money, the company was ripe for a takeover. In January of that year, a group of Cleveland investors (which, importantly, was made up of career supermarket operators) bought shares in Fisher totaling approximately 55% of the value of the company.

The group was composed of members of the Stop-N-Shop Super Markets Association (no relation to the New England or California Stop and Shops), a Cleveland-based supermarket cooperative. Several members of the Stop-N-Shop group were previously part of another Cleveland-based cooperative, Foodtown Supermarkets, which was formed in 1948 and sold to ACF-Wrigley supermarkets in 1956. (Thanks to "Traveler" for straightening out my facts on this. See the comments section for this post for more interesting details.) The individuals leading the buyout were Carl and John Fazio and Joe Fana of Fazio’s Stop-N-Shop, Sam and Frank Costa of Costa’s Stop-N-Shop, and Seaway Foods, an Aurora, Ohio-based wholesale grocer. Joining the new management group would be Julius (Julie) Kravitz, the executive director of the Stop-N-Shop association. Interestingly, the prospective new ownership group owned only seven supermarkets between them, compared with Fisher’s over 70 stores at the time. The Fisher name would be maintained for the new corporate entity and for a time on the stores as well.

In February 1965, the group made an offer to buy out the remaining shares of the company from the Fisher, Salmon and Conway families. A stockholders meeting was set for the following month, and despite some very public objections from a few relatively small stockholders, the transaction went through. Fisher Foods had a new, energized group of leaders and a new lease on life.

Right away, the Fisher-Fazio team set about modernizing and upgrading the stores, and placing an increased emphasis on meats, deli, produce and wines. It didn’t take long for sales results to improve, and within the first year profits began to rebound as well. The company began to expand into other Ohio markets, including the Akron area, where the first Fazio’s “Family Center”, a 60,000 square foot food and general merchandise combination store, would open in 1968.

In 1968, Fisher made its first acquisition outside the Ohio market with the purchase of Chicago's Dominick’s Finer Foods, an 18-store chain with locations throughout the city and in the (mostly north) near suburbs. A family owned business with an excellent reputation and strengths comparable to Fazio’s, Dominick’s was still a relatively small player compared to Chicago market leader Jewel Tea, a still fairly strong National Tea, and a still-participating A&P, but that would change in the coming years as Dominick’s would grow tremendously, eventually taking the number-two spot in the market. Dominick DiMatteo, Jr., company president and son of Dominick’s founder, would be named a vice president of Fisher Foods.

Fisher also entered the fast food business in 1969 when it acquired a stake in Columbus-based National Fast Food Corporation, owners of the Arthur Treacher’s Fish and Chips chain. Famous British actor that he was, I remember ol’ Arthur best as the Constable in the movie Mary Poppins, though he played many other film roles. As part of the agreement, Fisher took over territory rights for Arthur Treacher’s in the Cleveland and Chicago markets, totaling at the time over 100 restaurants. One more company Fisher took over during the late sixties was Clabers, a seven store chain of “junior” department stores in the Pittsburgh area.

The new Fazio’s stores sported a fresh, interesting appearance that to my mind preceded the “70’s look” for the industry as a whole by at least a couple of years. In 1967, Fisher opened a 36,000 square foot Fazio's store in the new Midway Mall in Elyria, Ohio, that received very favorable reviews in the supermarket industry press and would set the style for Fazio’s stores into the next decade. This store featured a dark red brick façade, with a cedar-shingled mansard roof above the store entrance and relatively small wood-framed windows. The cedar-shingled motif continued inside the store with rooflike awnings above the delicatessen and bakery departments. Freezer cases were an elegant burnt umber, a contrast to the pastel colors that were popular in years past.

The first five photos were taken between 1969 and 1972 and are typical of the Fazio’s stores of that period. The exterior photo is extremely similar in appearance to the Elyria store mentioned above, and the interior shots show minor differences, but are fairly close as well. Some of you may remember the very 70’s Kraft “Squeez-A-Snak” tubes which are shown in the foreground of the second photo. These were among my Grandmother’s favorites. If I remember right, they came in about four or five flavors, some much less appetizing than others.

The sixth photo, from 1968, shows the entrance to the first Fazio’s Family Center in Akron, Ohio.

It Was Fresher at Fisher's

Fisher Foods, Cleveland’s largest grocery chain for a major chunk of its 80-year history, was founded in 1907 as Fisher Brothers Company. The Fisher Brothers, Manning and Charles, were natives of Jersey City, New Jersey and got their start in the grocery business in New York City in the waning years of the 19th century, where Manning worked for James Butler, a grocer who owned 150 stores in the city. Eager to make their own mark in the business, the brothers set out for the greener pastures of Cleveland and opened their first store there at 4623 Lorain Avenue.

The Fishers were joined in Cleveland by Irish-born Joseph Salmon, who had also worked for Butler, and would manage that first Cleveland store. Years later, upon Manning Fisher’s death in 1931, Salmon would assume the presidency of the company. Manning’s son Ellwood would eventually take the company reins in the late thirties. The company grew quickly, to 24 stores in its first five years, then to over 120 stores by the mid-twenties, surpassing 300 stores in the decade that followed.

Like many supermarket chains, Fisher stayed in step with industry trends. The company launched self-service with their first “Master Market”, a larger (average 12,000 square foot) format that would become their standard, in October 1937. The company would build over 50 of these by the dawn of World War II. Also, as with a large number of other chains, Fisher’s consolidation move towards larger stores would lower their overall store count into the late forties and early fifties. Throughout this period, the company would restrict its market area to the greater Cleveland area, as an Elyria Chronicle-Telegram article put it, “as far west as Oberlin, as far east as Ashtabula, and as far south as Medina and Bedford”.

The photos, in reverse chronological order, are as follows: a 1956 store, unidentified location, from Chain Store Age, the second photo of a brand new Fisher Foods Master Market which opened in Elyria, Ohio in June, 1952 and last, a photo of the very first Fisher Bros. store. The latter two photos are from the Elyria Chronicle-Telegram.

Snow Falling On Fazio's

An early 1971 view of a brand new suburban Cleveland Fazio’s supermarket. This store opened six years after the Fazio and Costa families had bought out the moribund Fisher Foods chain, which was at one time the dominant food chain in the area but by the early sixties had fallen on hard times. By the time the pictured store opened, the company (which still went by the official name of Fisher Foods) was well on their way back to the top.

This store, with its mansard shakeroof design, was typical of new Fazio’s stores of the 60’s and 70’s.