Lessons Learned? Facing the Cold Reality of Job Loss at Christmas Time

With fewer than four aisles of merchandise remaining in a local Dominick’s – a Chicago-area grocer that will become part of local history one week from now, the sound of Christmas music echoing through the nearly-empty store on Wednesday morning turned a somber moment into something that was nothing short of surreal. As two employees stocked what little merchandise remained onto the mostly-empty shelves, a lone cashier rang my order up. Knowing that I was surrounded by people who will not have a job shortly after Christmas Day is nothing short of heartbreaking.

The thought of anyone losing their job through no fault of their own is sad enough, but making Christmas the beginning of the end makes a difficult situation much harder to accept.

A few weeks ago, Safeway, Dominick’s parent company announced that every Dominick’s location would close by December 28. Sadly, this decision on the part of Safeway management was not a surprise, since Dominick’s has fallen victim to several problems that have finally intersected and become too big to ignore.

When Safeway acquired Dominick’s in 1998, a culture clash between the new parent company’s California leadership and the Midwestern employees and customers started to take shape. If anyone needs proof that history repeats itself, look no further than the countless times a retailer moves into a new market – especially via the takeover of a local company, and assumes the formula that worked “back home” will apply to their new customers.

After the takeover, Dominick’s personality changed. Yes, companies – especially if they had been family-owned and operated throughout the bulk of their history – develop a personality. The “local grocery store” turned into something alien; this change is difficult to describe – almost like trying to describe to a mechanic a new noise that your car makes. However, a former co-worker of mine offered a great example:

The south Park Ridge, IL. Dominick’s had a loyal following: senior citizens. This location had been demolished and replaced with a much larger store – one with underground parking. Once this new store opened, those senior citizens – the loyal customers wandered around the store – seemingly lost and uncomfortable.

Prices increased as a result of an attempt to move upscale. However, moving upscale is impossible if the only change is charging more for products that competitors sell at lower prices. About two years ago, I stopped at the Palatine, IL. location to buy water, since everything else was much cheaper at the nearest Joe Caputo and Sons, a much smaller and newer grocer. Although this was about 8:30 on a weeknight, I may have been the only customer in the store. After leaving, I stopped at Caputo’s to finish my shopping. The kind of crowd that filled this new store was like the crowd that filled a Dominick’s until only a few years ago.

There was a warning sign that most items were overpriced: declining sales. Along with Jewel – the other local grocery store chain — sales fell once these two competitors had to face competition from not only outsiders, but small local operations, such as Caputo’s. While Jewel lowered its prices in an attempt to compete, Dominick’s had been slow to react.

While prices increased and sales dropped, the relationship between Safeway and Dominick’s union employees appeared to take on an adversarial relationship that played itself out in the local newspapers – almost from the start of the takeover.

Based on personal experience at Safeway locations in Colorado and Wyoming, this isn’t a bad company. However, it appears as though a big problem – a fatal problem — may have been not learning about the differences between Safeway’s traditional customers out West, and Dominick’s customers.

Either as a result of ignorance and/or arrogance, some higher-ups at nationwide companies fail to identify the uniqueness of people who are potential, current, or disgruntled customers within different the parts of the US.

When Macy’s management decided to drop its regional department store names – including Chicago’s Marshall Field and Company — and replace them with that of the parent company, Marshall Field’s customers revolted by staying away from “Macy’s.” Even though sales dropped significantly, the higher-ups at Macy’s refused to admit that the name change touched a nerve with the locals who felt as though their Midwestern retail roots were under attack by a faceless invader from New York.

However, when P.A. Bergner bought Carson, Pirie, Scott and Company around 1990, the Bergner philosophy was much different.

Bergner’s management acknowledged the importance of the Carson’s name to local shoppers by not only keeping the Carson’s name, but also by changing the Chicago-area Bergner’s stores to Carson’s.

There is also the issue of being slow to react to change. When Kmart finally retired its mechanical cash registers in the eighties, the other retailers were switching from electronic cash registers to electronic cash registers with bar code readers. Needless to say, Kmart had been slow to react to its new generation of competitors, and it has dozens of closed stores to prove it.

One of the few bright spots in this sad period in Chicago history is that other grocery store chains have committed to reopening some of the soon-to-be-former Dominick’s. Yes, there are people who say that the demise of companies is a good thing, since something better will fill the void. Unfortunately, there are times when the demise of a company is hard to justify, such as when there were unheeded warning signs or when the loss of that company is symbolic of the demise of local culture.

It is sad to think that there are circumstances when wishing someone a Merry Christmas serves as a reminder that the reasons for a Merry Christmas diminish as December 25 approaches. However, as the Dominick’s name disappears, perhaps wishing that not only new opportunities arise for those stores and the people who work there, but business leaders also learn from the mistakes of the past, so that the demise of a business and its jobs doesn’t appear as history repeating itself – again.

Image: Courtesy of: http://hiscrivener.wordpress.com/2010/08/10/if-the-u-s-government-wont-help-the-unemployed-maybe-faith-will/

Topics: Dominick’s, Macy’s, Job Loss, Unemployment, Safeway, Change