Safeway to dispose of Dominick's chain in Chicago

Safeway announced last week that it plans to dispose of its 72 Dominick's supermarkets in the Chicago area. Safeway is also the parent company for Genuardi's, which recently exited the Philadelphia market (with the exception of one yet-to-close store in Audubon, PA).

Dominick's had a loss of $31.5 million for fiscal 2012, and losses are projected to increase this year. Safeway said that selling the chain will likely result in a cash-tax benefit of between $400 - $450 million that it will use to offset expenses from the recent sale of its Canadian assets.

In a separate report, Safeway said there has been interest from several parties for Dominick's, and the company seeks to exit the Chicago market by early 2014.

According to Safeway President and CEO Robert Edwards, "Everything we do is designed to maximize shareholder value, and the sale of Canada, the partial IPO of Blackhawk, and now the decision to leave Chicago demonstrates that commitment."

Safeway to count on non-core businesses for income growth

We're used to hearing about struggling companies disposing of non-core businesses in order to concentrate on what they know and do best. However, Safeway announced last week that with supermarkets being a relatively low-growth endeavor these days, adding more non-core businesses will enable it to grow operating income.

Examples of non-core activities for Safeway include Blackhawk gift cards and the property development center business, and the company plans to create a wellness program.

Safeway is in the process of disposing of Genuardi's supermarkets, once considered a core brand.